Registration No. 333-59103
Registration No. 811-03989
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-6
REGISTRATION STATEMENT UNDER THE SECURITIES
ACT OF 1933 | / / | |||
Pre-Effective Amendment No. | / / | |||
Post-Effective Amendment No. 16 | / X / | |||
and/or | ||||
REGISTRATION STATEMENT UNDER THE INVESTMENT | ||||
COMPANY ACT OF 1940 | / / | |||
Amendment No. 24 | / X / |
(Check appropriate box or boxes.)
NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT | ||
(Exact Name of Registrant) | ||
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY | ||
(Name of Depositor) | ||
720 East Wisconsin Avenue, Milwaukee, Wisconsin | 53202 | |
(Address of Depositor's Principal Executive Offices) | (Zip Code) | |
Depositor's Telephone Number, including Area Code 414-271-1444 | ||
Raymond J. Manista, Vice President, General Counsel and Secretary The Northwestern Mutual Life Insurance Company 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 |
||
(Name and Address of Agent for Service) |
Copy to:
Chad E. Fickett, Assistant General Counsel
The Northwestern Mutual Life Insurance Company
720 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
414-665-1209
Approximate Date of Proposed Public Offering Continuous
It is proposed that this filing will become effective (check appropriate space)
immediately upon filing pursuant to paragraph (b) of Rule 485
on DATE pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(1) of Rule 485
X on May 1, 2009 pursuant to paragraph (a)(1) of Rule 485
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
Title of Securities Being Registered: Interests in the Northwestern Mutual Variable Life Account under flexible premium variable joint life insurance policies.
294483-VJL
P r o s p e c t u s
May 1, 2009
Variable Joint Life
Issued by The Northwestern Mutual Life Insurance Company
and the Northwestern Mutual Variable Life Account
This prospectus describes a flexible premium Variable Joint Life Insurance Policy with insurance payable on second death (the Policy). You may choose to invest your Net Premiums in one or more Divisions of the Northwestern Mutual Variable Life Account (the Separate Account), each of which invests in one of the corresponding Portfolios listed below:
Northwestern Mutual Series Fund, Inc. | ||
Growth Stock Portfolio | Small Cap Growth Stock Portfolio | |
Focused Appreciation Portfolio | Small Cap Value Portfolio | |
Large Cap Core Stock Portfolio | International Growth Portfolio | |
Index 500 Stock Portfolio | International Equity Portfolio | |
Domestic Equity Portfolio | Money Market Portfolio | |
Equity Income Portfolio | Select Bond Portfolio | |
Mid Cap Growth Stock Portfolio | High Yield Bond Portfolio | |
Index 400 Stock Portfolio | Balanced Portfolio | |
Mid Cap Value Portfolio | Asset Allocation Portfolio | |
Fidelity® Variable Insurance Products | ||
VIP Mid Cap Portfolio | ||
Russell Investment Funds | ||
Multi-Style Equity Fund | ||
Aggressive Equity Fund | ||
Real Estate Securities Fund | ||
Non-U.S. Fund | ||
Core Bond Fund |
Please note that the Policy and the Portfolios are not guaranteed to achieve their goals
and are not federally insured. The Policy and the Portfolios have not been endorsed by any bank or government agency and are subject to risks, including loss of the principal amount invested.
This Policy is subject to the law of the state in which it is issued. Some of the terms of the Policy may differ from the terms of the Policy delivered in another state because of state specific legal requirements. Areas where state specific Policy provisions may apply include, but are not limited to:
| certain investment options and certain Policy features; and |
| fund transfer rights. |
Please read carefully this prospectus and the accompanying prospectuses for the corresponding Portfolios and keep them for future reference. These prospectuses provide information that you should know before investing in the Policy. No person is authorized to make any representation in connection
with the offering of the Policy other than those contained in these prospectuses.
The Securities and Exchange Commission (SEC) has not approved or disapproved
the Policy or determined that this prospectus is accurate or complete.
It is a criminal offense to state otherwise.
We no longer issue the Policy described in this prospectus. The variable life insurance policies we presently offer are described in separate prospectuses.
PROSPECTUS
Variable Joint Life
| Flexible Premium Variable Joint Life Insurance Policy |
| Insurance Payable on Second Death |
The following summary identifies some of the benefits and risks of the Policy. It omits important information which is included elsewhere in this prospectus, in the attached mutual fund prospectuses, and in the terms of the Policy. Unless clear from their context or otherwise appropriate, all of the capitalized terms used in this prospectus are defined herein or at the end of this prospectus in the Glossary of Terms.
Death Benefit The primary benefit of your Policy is the life insurance protection that it provides. The Death Benefit is payable on the second death while the Policy is in force. The Policy offers a choice of three Death Benefit options:
Option A - Specified Amount;
Option B - Specified Amount Plus Policy Value; or
Option C - Specified Amount Plus Premiums Paid.
Under each of these options, you selected the Specified Amount when you purchased the Policy. In addition, we will increase the Death Benefit under any of the options if necessary to meet the definitional requirements for life insurance for federal income tax purposes.
Access to Your Values You may surrender your Policy for the Cash Value at any time during the lifetime of at least one of the Insured persons. You may make a withdrawal of Cash Value. You may borrow up to 90% of the Policy Value, after the surrender charge has been deducted, using the Policy as security.
Flexibility You selected the Death Benefit option and Specified Amount subject to our availability limits. You control the amount and timing of Premium Payments, within limits. You chose the test for qualifying this Policy as life insurance for federal income tax purposes. You may change the Death Benefit option, or increase or decrease the Specified Amount, subject to our approval. You may direct the allocation of your premiums and apportion the Separate Account assets supporting your Policy among the various Divisions of the Separate Account. Subject to certain limits, you may transfer accumulated amounts from one Division to another.
Payment Plan Options There are several ways of receiving proceeds under the Death Benefit and surrender provisions of the Policy, other than in a lump sum. More detailed information concerning these payment plan options is included elsewhere in this prospectus.
Tax Benefits You are generally not taxed on your Policys investment gains until you surrender the Policy or make a withdrawal.
Investment Risk Your Policy allows you to participate in the investment experience of the Divisions you select. You bear the corresponding investment risks. You will be subject to the risk that the investment performance of the Divisions will be unfavorable and that, due both to the unfavorable performance and the resulting higher insurance charges, the Policy Value will decrease. You could lose everything you invest. You may find a comprehensive discussion of these investment risks in the attached mutual fund prospectuses. You will also be subject to the risk that the investment performance of the Divisions you choose may be less favorable than that of other Divisions, and in order to keep the Policy in force, you may be required to pay more premiums than originally planned.
Policy for Long-Term Protection Your Policy is designed to serve your need for long-term life insurance protection. It is not suitable for short-term goals. We have not designed the Policies for frequent trading.
1
Policy Lapse Your Policy will lapse if you do not pay sufficient premium to keep it in force. Favorable investment experience will reduce the amount of premium you need to pay to keep the Policy in force, but we do not guarantee investment experience. Policy loans or withdrawals of Cash Value may increase the premium needed to keep the Policy in force.
Policy Loan Risks A loan, whether or not repaid, will affect your Policy Value over time because the amounts borrowed do not participate in the investment performance of the Divisions. The effect of a loan may be either favorable or unfavorable, depending on whether the earnings rate credited to the loan amount is higher or lower than the investment performance of the unborrowed amounts left in the Divisions; in addition, a charge is deducted from the Policy Value each month while there is Policy Debt. The Death Benefit is reduced by the amount of any Policy Debt outstanding. If you surrender the Policy or allow it to lapse while Policy Debt is outstanding, the amount of the loan, to the extent it has not previously been taxed, will be considered as an amount you received and taxed accordingly. Policy Debt reduces the Cash Value and increases the risk that your Policy will lapse.
Limitations on Access to Your Values A withdrawal of Cash Value may not reduce the loan value to less than any Policy Debt outstanding. The withdrawal amount may not reduce the Specified Amount to less than the minimum amount we would issue at the time of withdrawal. Following a withdrawal the remaining Cash Value must be at least three times the current monthly charges for the cost of insurance and other expenses. The minimum amount for a withdrawal is $250. A withdrawal of Cash Value will reduce the Death Benefit.
Adverse Tax Consequences Our understanding of the principal tax considerations for the Policy under current tax law is set forth in this prospectus. There are areas of some uncertainty under current law, and we do not address the likelihood of future changes in the law or interpretations thereof. Among other risks, your Policy may become a MEC if the cumulative premium you pay exceeds a defined limit; surrenders, withdrawals and loans under the Policy will then be taxable as ordinary income to the extent there are earnings in the Policy, and a 10% penalty may apply to these distributions. Conversely, excessive Policy loans could cause a Policy to terminate with no value with which to pay the tax liability. (See Tax Considerations.) Death Benefit proceeds may be subject to state and/or inheritance taxes.
Risk of an Increase in Current Fees and Expenses Certain fees and expenses are currently assessed at less than their maximum levels. We may increase these current charges in the future up to the guaranteed maximum levels. If fees and expenses are increased, you may need to increase the amount of premiums to keep the Policy in force.
The following tables describe the fees and expenses that are payable when a Policy is bought, owned, or surrendered. See Charges and Expenses for a more detailed description.
The first table describes the fees and expenses that are payable when you pay premiums, transfer amounts between Divisions, make a withdrawal, change the Specified Amount or change the Death Benefit option. See Charges and Expenses for a more detailed description.
Charge
|
When Charge is Deducted
|
Current Charge
|
Maximum Guaranteed Charge
| |||
State Premium Tax Charge | Upon each Premium Payment |
2.35% of the premium1 | 3.6% of the premium (includes both State Premium Tax Charge and OBRA Expense Charge) | |||
OBRA Expense Charge2 | Upon each Premium Payment | 1.25% of the premium1 | ||||
Sales Load | Upon each Premium Payment | Up to 6.4% of Target Premium for the first 10 Policy Years; up to 2.4% thereafter3 and on all premiums in excess of Target Premium for all Policy Years | Same as current amount | |||
Fee for Transfer of Assets, Withdrawals or Change of Specified Amount | When you make more than 12 transfers of assets among the Separate Account Divisions in a Policy Year, make withdrawals or change the Specified Amount more | Currently waived | $25 |
2
than once in a Policy Year |
||||||
Fee for Change in the Death Benefit Option | Upon a change in the Death Benefit option | Currently waived | $250 | |||
Surrender Charge | Upon surrender during the first ten Policy Years | 50% of the premiums paid in the first Policy Year grading to zero at the end of the tenth Policy Year4 | $50 per $1,000 of initial Specified Amount for any combination of Issue Age, sex, and underwriting classification | |||
Expedited Delivery Charge | When express mail delivery is requested | $15 per delivery | The fee may increase but will not exceed our administrative or other costs associated with this charge | |||
Wire Transfer Fee | When a wire transfer is requested | $25 per transfer5 | The fee may increase but will not exceed our administrative or other costs associated with this charge |
1 |
See Information about the Policy Premium Expense Charges for more information. |
2 |
Due to a 1990 federal tax law change under the Omnibus Budget Reconciliation Act of 1990 (OBRA), as amended, insurance companies are generally required to capitalize and amortize certain acquisition expenses rather than currently deduct such expenses. Due to this capitalization and amortization, the corporate income tax burden on insurance companies has been affected. We make a charge of up to 1.25% against each Premium Payment to compensate us for corporate taxes. |
3 |
The sales load in Policy Years 1-10 is applied to the premiums paid up to the Target Premium. All other premiums are charged a 2.4% sales load. The Target Premium is a hypothetical annual premium, which varies based on the initial Specified Amount and the characteristics of the Insured persons, such as Issue Age, sex and underwriting classification. |
4 |
The surrender charge percentage is applied to the premiums actually paid during the first Policy Year or the Target Premium, whichever is less. The percentage remains level during Policy Year one, and declines monthly to zero during Policy Years two through ten. For more information on the surrender charge, see Surrender Charge in this prospectus. The Schedule of Maximum Charges to your Policy will indicate the maximum surrender charges applicable to your Policy. |
5 |
We currently charge up to $50 for international wires. |
Periodic Charges (Other than Portfolio Operating Expenses)1
The next table describes the fees and expenses, other than operating expenses for the Portfolios, that you will pay periodically during the time that you own the Policy. See Charges and Expenses for a more detailed description.
Charge
|
When Charge is Deducted
|
Current Charge
|
Maximum Guaranteed Charge
| |||
Monthly Policy ChargeCost of Insurance Charge2, 3 | ||||||
Maximum Charge4 | Monthly, on each monthly processing date | $1,000.00 per year per $1,000 of net amount at risk | Same as current amount | |||
Minimum Charge5 | Monthly, on each monthly processing date | $0.00102 per year per $1,000 of net amount at risk | Same as current amount | |||
Charge for one male and one female Insured, Issue Ages 45, Premier Non-Tobacco underwriting classification (varies by Policy Year) 6 | Monthly, on each monthly processing date | $0.00993 per year per $1,000 of net amount at risk in the first Policy Year6 | Same as current amount in the first Policy Year7 | |||
Monthly Policy ChargeMortality and Expense Risk Charge | ||||||
Monthly Policy | Monthly, on each | 0.10% annually (monthly rate of 0.00833%) of the | 0.90% annually |
3
Charge
|
When Charge is Deducted
|
Current Charge
|
Maximum Guaranteed Charge
| |||
ChargeMortality and Expense Risk ChargeInvested Assets Component | monthly processing date | Policy Value less any Policy Debt | (monthly rate of 0.075%) of the Policy Value, less any Policy Debt | |||
Monthly Policy ChargeMortality and Expense Risk ChargeSpecified Amount Component3 | ||||||
Maximum Charge8 | Monthly, on each monthly processing date during the first ten Policy Years | $1.72 annually (monthly rate of $0.14333) per $1,000 of initial Specified Amount | Same as current amount | |||
Minimum Charge9 | Monthly, on each monthly processing date during the first ten Policy Years | $0.04 annually (monthly rate of $0.00333) per $1,000 of initial Specified Amount | Same as current amount | |||
Charge for Insureds Issue Ages 45 | Monthly, on each monthly processing date during the first ten Policy Years | $0.41 annually (monthly rate of $0.03417) per $1,000 of initial Specified Amount | Same as current amount | |||
Monthly Policy ChargeAdministrative Charge | Monthly, on each monthly processing date | $60 annually ($5 monthly) | $90 annually ($7.50 monthly) | |||
Monthly Policy ChargeUnderwriting and Issue Charge3,10 | ||||||
Maximum Charge11 | Monthly, on each monthly processing date during the first ten Policy Years | $0.42 annually (monthly rate of $0.035) per $1,000 of initial Specified Amount | Same as current amount | |||
Minimum Charge12 | Monthly, on each monthly processing date during the first ten Policy Years | $0.18 annually (monthly rate of $0.015) per $1,000 of initial Specified Amount | Same as current amount | |||
Charge for Insureds Issue Ages 45, Premier Non-Tobacco underwriting classification | Monthly, on each monthly processing date during the first ten Policy Years | $0.18 annually (monthly rate of $0.015) per $1,000 of initial Specified Amount | Same as current amount | |||
Monthly Policy ChargeDeferred Sales Charge | Monthly, on each monthly processing date during the first ten Policy Years | 7.5% annually (monthly rate of 0.625%) for the first ten Policy Years. (The charge for each Policy Year is applied to the cumulative amount of premiums paid during the first Policy Year, up to the Target Premium.) | Same as current amount | |||
Monthly Policy ChargeCharge for Expenses and Taxes Associated with Any Policy Debt13 | Monthly, on each monthly processing date when there is Policy Debt | 0.90% annually (monthly rate of 0.075%) of outstanding Policy Debt for the first ten Policy Years; 0.35% annually (monthly rate of 0.02917%) thereafter | 2% annually (monthly rate of 0.16667%) of outstanding Policy Debt |
1 |
The charges described in this table may vary based upon one or more of the following characteristics: Insureds Issue Ages, sex, and underwriting classifications; initial Specified Amount; Target Premium; Policy Date and Policy Year. |
2 |
The Cost of Insurance Charge is determined by multiplying the net amount at risk by the cost of insurance rate. The net amount at risk is the difference between the Death Benefit and the Policy Value. The cost of insurance rate reflects the Issue Age, sex and underwriting classification of the Insured persons, the Policy Date and Policy Year. |
3 |
The charge varies based on individual characteristics. The rates shown in the table may not be representative of the charge a particular Owner may pay. For information about the rate for your particular situation, you may request a personalized illustration from your Financial Representative. |
4
4 |
The maximum Cost of Insurance Charge assumes that the Insureds have the following characteristics: one male and one female, Attained Age 100 of the younger Insured, both substandard underwriting classification. The maximum Cost of Insurance Charge shown may also apply to other combinations of Policy Year and Insured characteristics. |
5 |
The minimum Cost of Insurance Charge assumes that the Insureds have the following characteristics: both female, both Issue Age 20, both Premier Non-Tobacco classification. The minimum Cost of Insurance Charge shown may also apply to other combinations of Policy Year and Insured characteristics. |
6 |
Generally, the cost of insurance rate will increase each Policy Year. |
7 |
The maximum guaranteed cost of insurance rate will exceed the current rate in most Policy Years. Generally, the rate will increase each Policy Year. |
8 |
The maximum Mortality and Expense Risk Charge Specified Amount Component assumes that the Insureds have the following characteristics: one male and one female, Issue Ages 75 and older. |
9 |
The minimum Mortality and Expense Risk Charge Specified Amount Component assumes that the Insureds have the following characteristics: one male and one female, Issue Ages 25 and younger. |
10 |
The charge may not exceed $900-$2,100 annually ($75-$175 monthly amount) based on the underwriting classification of the Insureds on the Date of Issue. |
11 |
The maximum Underwriting and Issue Charge assumes that the Insureds have the following characteristic: substandard underwriting classification. |
12 |
The minimum Underwriting and Issue Charge assumes that the Insureds have the following characteristic: standard underwriting classification. |
13 |
The charge is applied to the Policy Debt. We add unpaid interest to the amount of the loan. Interest on a Policy loan accrues and is payable on a daily basis at an annual effective rate of 5%. The amount of the Policy loan will be transferred from the Divisions to our General Account and credited on a daily basis with an annual earnings rate equal to the 5% Policy loan interest rate. |
Annual Portfolio Operating Expenses
The table below shows the range (minimum and maximum) of total operating expenses, including investment advisory fees, distribution (12b-1) fees and other expenses of the Portfolios offered by Northwestern Mutual Series Fund, Inc., Fidelity® Variable Insurance Products, and the Russell Investment Funds that are available for investment under the Policy. The first line of this table lists expenses that do not reflect fee waivers or expense limits and reimbursements, nor do they reflect short-term trading redemption fees, if any, charged by the Portfolios. The information is based on operations for the year ended December 31, 2008. More details concerning these fees and expenses are contained in the attached prospectuses for the Funds.
Minimum | Maximum | |||
Range of Total Annual Portfolio Operating Expenses (expenses include investment advisory fees, distribution (12b-1) fees, and other expenses as a percentage of average Portfolio assets)* | % | % | ||
Range of Total Annual Portfolio Operating Expenses After Contractual Fee Waiver or Reimbursement** | % | % |
* For certain Portfolios, certain expenses were reimbursed or fees waived during 2008. It is anticipated that these voluntary expense reimbursement and fee waiver arrangements will continue past the current year, although certain arrangements may be terminated at any time. After taking into account these arrangements and any contractual fee waiver or expense reimbursement arrangements, Annual Portfolio Operating Expenses would have ranged from a minimum of % to a maximum of %.
** The Range of Total Annual Portfolio Operating Expenses After Contractual Fee Waiver or Reimbursement line in the above table shows the minimum and maximum fees and expenses charged by all of the Portfolios after taking into account contractual fee waiver or reimbursement arrangements in place. Those contractual arrangements are designed to reduce Total Annual Portfolio Operating Expenses for Owners and will continue for at least one year from the date of this prospectus. For more information about which Portfolios currently have such contractual reimbursement or fee waiver arrangements in place, see the prospectuses of the underlying Funds.
The following table shows total annual operating expenses of each Portfolio available for investment under the Policy. Operating expenses are expressed as a percentage of average net assets for the year ended December 31, 2008, except as otherwise set forth in the notes to the table.
Portfolio | Investment Advisory Fees |
Other Expenses |
12b-1 Fees |
Acquired Fund Fees & Expenses |
Total Operating Expenses |
Total
Net Operating Expenses (Including Contractual Waivers, Limitations and Reimbursements) |
||||||||||||
Northwestern Mutual Series Fund, Inc. |
||||||||||||||||||
Growth Stock Portfolio |
% | % | % | % | % | % | ||||||||||||
Focused Appreciation Portfolio(1) |
% | % | % | % | % | % | ||||||||||||
Large Cap Core Stock Portfolio |
% | % | % | % | % | % | ||||||||||||
Index 500 Stock Portfolio |
% | % | % | % | % | % | ||||||||||||
Domestic Equity Portfolio(2) |
% | % | % | % | % | % | ||||||||||||
Equity Income Portfolio(3) |
% | % | % | % | % | % | ||||||||||||
Mid Cap Growth Stock Portfolio |
% | % | % | % | % | % | ||||||||||||
Index 400 Stock Portfolio |
% | % | % | % | % | % | ||||||||||||
Mid Cap Value Portfolio(4) |
% | % | % | % | % | % | ||||||||||||
Small Cap Growth Stock Portfolio |
% | % | % | % | % | % | ||||||||||||
Small Cap Value Portfolio(5) |
% | % | % | % | % | % | ||||||||||||
International Growth Portfolio(6) |
% | % | % | % | % | % | ||||||||||||
International Equity Portfolio(7) |
% | % | % | % | % | % |
5
Money Market Portfolio(8) |
% | % | % | % | % | % | ||||||||||||
Select Bond Portfolio |
% | % | % | % | % | % | ||||||||||||
High Yield Bond Portfolio |
% | % | % | % | % | % | ||||||||||||
Balanced Portfolio |
% | % | % | % | % | % | ||||||||||||
Asset Allocation Portfolio(9) |
% | % | % | % | % | % | ||||||||||||
Fidelity® Variable Insurance Products |
||||||||||||||||||
VIP Mid Cap Portfolio(10) |
% | % | % | % | % | % | ||||||||||||
Russell Investment Funds |
||||||||||||||||||
Multi-Style Equity Fund(11) |
% | % | % | % | % | % | ||||||||||||
Aggressive Equity Fund(12) |
% | % | % | % | % | % | ||||||||||||
Real Estate Securities Fund |
% | % | % | % | % | % | ||||||||||||
Non-U.S. Fund(13) |
% | % | % | % | % | % | ||||||||||||
Core Bond Fund(14) |
% | % | % | % | % | % |
[Footnotes to be provided in subsequent filing]
The Northwestern Mutual Life Insurance Company is a mutual life insurance company organized by a special act of the Wisconsin Legislature in 1857. It is licensed to conduct a conventional life insurance business in the District of Columbia and in all states of the United States. The total assets of Northwestern Mutual exceeded $154.8 billion as of December 31, 2008. The Home Office of Northwestern Mutual is located at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
Northwestern Mutual, Company we, us and our in this prospectus mean The Northwestern Mutual Life Insurance Company.
We established the Separate Account by action of our Trustees on November 23, 1983, in accordance with the provisions of Wisconsin insurance law. The Separate Account is registered with the SEC as a unit investment trust under the Investment Company Act of 1940 (the 1940 Act). We own the assets in the Separate Account and we are obligated to pay all benefits under the Policies. We may use the Separate Account to support other variable life insurance policies we issue. We have divided the Separate Account into Divisions, each of which invests in shares of one Portfolio of the Funds.
Under Wisconsin law, Separate Account assets are held separate from our other assets and are not part of our General Account. Income, gains, and losses, whether or not realized, from assets allocated to the Separate Account will be credited to or charged against the Separate Account without regard to our other income, gains, or losses. Income, gains, and losses credited to, or charged against, a Division reflect that Divisions own investment performance and not the investment performance of our other assets. Except with respect to transfers from the Separate Account, we may not use the Separate Accounts assets to pay any of our liabilities other than those arising from the Policies and any other variable life insurance Policies funded by the Separate Account. We may, however, use all of our assets (except those held in certain other separate accounts) to satisfy our obligations under your Policy.
Where permitted by law and subject to any required regulatory approvals or votes by Owners, we reserve the right to:
| operate the Separate Account or a Division either as a unit investment trust or a management investment company under the 1940 Act, or in any other form permitted by law, if deemed by the Company to be in the best interest of Owners; |
| invest current and future assets of a Division in securities of another Portfolio as a substitute for shares of a Portfolio already purchased or to be purchased; |
| transfer cash from time to time between the General Account and the Separate Account as deemed necessary or appropriate and consistent with the terms of the Policy, including but not limited to transfers for the deduction of charges and in support of payment options; |
| transfer assets of the Separate Account in excess of reserve requirements applicable to the Policies supported by the Separate Account to the General Account; |
| register or deregister the Separate Account under the 1940 Act or change its classification under that Act; |
| create new separate accounts; |
| add, delete or make substitutions for the securities and other assets held or purchased by the Separate Account; |
6
| restrict or eliminate any voting rights of Owners or other persons having voting rights as to the Separate Account; and |
| make any changes to the Separate Account to conform with, or required by any change in, federal tax law, the 1940 Act and regulations promulgated thereunder, or any other applicable federal or state laws. |
In the event that we take any of these actions, we may make an appropriate endorsement of your Policy and take other actions necessary to comply with applicable law.
A variety of investment options are offered under the Policy for the allocation of your premiums. However, the Company does not endorse or recommend a particular option, nor does it provide asset allocation or investment advice. You are responsible for choosing your investment options and should make your choices based on your individual situation and risk tolerances. After making your initial allocation decisions, you should monitor your allocations and periodically review the options you select and the amounts allocated to each to ensure your selections continue to be appropriate. The amounts you invest in a particular Division are not guaranteed and, because both principal and any return on the investment are subject to market risk, you can lose money.
The assets of each Division are invested in a corresponding Portfolio that is a series of one of the following mutual funds: Northwestern Mutual Series Fund, Inc; Fidelity® Variable Insurance Products; and the Russell Investment Funds. The Separate Account buys shares of the Portfolios at their respective net asset values without sales charge. The Portfolios are available for investment only by separate accounts supporting variable insurance products and are not publicly traded. Their performance can differ substantially from publicly traded mutual funds with similar names. The specific Portfolios available under your Policy may change from time to time, and not all Portfolios in which assets of the Separate Account are invested may be available under your Policy. Your ability to invest in a Portfolio may be affected by the actions of such Portfolio, such as when a Portfolio closes.
The investment objectives of each Portfolio are set forth below. There is no assurance that any of the Portfolios will achieve its stated objective(s). You can find more detailed information about the Portfolios, including a description of each Portfolio, in the attached Portfolio prospectuses. Read the prospectuses for the Portfolios carefully before investing.
Northwestern Mutual Series Fund, Inc.
The principal investment adviser for the Portfolios of the Northwestern Mutual Series Fund is Mason Street Advisors, LLC (MSA), our wholly-owned company. The investment advisory agreements for the respective Portfolios provide that MSA will provide services and bear certain expenses of the Fund. MSA employs a staff of investment professionals to manage the assets of the Fund and the other advisory clients of MSA. We provide related facilities and personnel, which MSA uses in performing its investment advisory functions. MSA has retained and oversees Templeton Investment Counsel, LLC, Capital Guardian Trust Company, T. Rowe Price Associates, Inc., American Century Investment Management, Inc. and Janus Capital Management LLC under investment sub-advisory agreements to provide day-to-day management of the Portfolios as indicated below. Templeton Investment Counsel, LLC has appointed Franklin Templeton Investments (Asia) Limited as an additional sub-adviser for the International Equity Portfolio. Each such sub-adviser may be replaced without the approval of shareholders. Please see the attached prospectus for the Northwestern Mutual Series Fund for more information.
Portfolio | Investment Objective | Sub-adviser (if applicable) | ||
Growth Stock Portfolio | Long-term growth of capital; current income is a secondary objective | N/A | ||
Focused Appreciation Portfolio | Long-term growth of capital | Janus Capital Management LLC | ||
Large Cap Core Stock Portfolio | Long-term growth of capital and income | N/A | ||
Index 500 Stock Portfolio | Investment results that approximate the performance of the Standard and Poors (S&P) 500® Index | N/A | ||
Domestic Equity Portfolio | Long-term growth of capital and income | Capital Guardian Trust Company | ||
Equity Income Portfolio | Long-term growth of capital and income | T. Rowe Price Associates, Inc. | ||
Mid Cap Growth Stock Portfolio | Long-term growth of capital | N/A | ||
Index 400 Stock Portfolio | Investment results that approximate the performance of the S&P MidCap 400® Index | N/A | ||
Mid Cap Value Portfolio | Long-term capital growth; current income is a secondary objective | American Century Investment Management, Inc. | ||
Small Cap Growth Stock Portfolio | Long-term growth of capital | N/A |
7
Small Cap Value Portfolio | Long-term growth of capital | T. Rowe Price Associates, Inc. | ||
International Growth Portfolio | Long-term growth of capital | N/A | ||
International Equity Portfolio | Long-term growth of capital | Templeton Investment Counsel, LLC; Franklin Templeton Investments (Asia) Limited | ||
Money Market Portfolio | Maximum current income to the extent consistent with liquidity and stability of capital* | N/A | ||
Select Bond Portfolio | To realize as high a level of total return as is consistent with prudent investment risk; a secondary objective is to seek preservation of shareholders capital | N/A | ||
High Yield Bond Portfolio | High current income and capital appreciation** | N/A | ||
Balanced Portfolio | To realize as high a level of total return as is consistent with prudent investment risk, through income and capital appreciation | N/A | ||
Asset Allocation Portfolio | To realize as high a level of total return as is consistent with reasonable investment risk | N/A |
* | Although the Money Market Portfolio seeks to preserve its value at $1.00 per share, it is possible to lose money by investing in the Money Market Portfolio. An investment in a money market portfolio is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any government agency. During extended periods of low interest rates, the yield of a money market portfolio may also become extremely low and possibly negative. Notwithstanding the preceding statements, Portfolio shareholders will be guaranteed to receive $1.00 net asset value for amounts that they held as of September 19, 2008 subject to the terms of the U.S. Treasurys Temporary Guarantee Program for money market funds. |
** | High yield bonds are commonly referred to as junk bonds. |
Fidelity® Variable Insurance Products
The Fidelity® VIP Mid Cap Portfolio is a series of Variable Insurance Products III. The Separate Account buys Service Class 2 shares of the Fidelity® VIP Mid Cap Portfolio, the investment adviser for which is the Fidelity Management & Research Company.
Portfolio | Investment Objective | Sub-adviser | ||
VIP Mid Cap Portfolio | Long-term growth of capital | Fidelity Management & Research Company, Inc. |
The assets of each of the Portfolios comprising the Russell Investment Funds are invested by one or more investment management organizations researched and recommended by Frank Russell Company (Russell), and an affiliate of Russell, the Russell Investment Management Company (RIMCo). RIMCo is the investment adviser of the Russell Investment Funds. Russell is our majority-owned subsidiary.
Portfolio | Investment Objective | |
Multi-Style Equity Fund | Long-term growth of capital | |
Aggressive Equity Fund | Long-term growth of capital | |
Real Estate Securities Fund | Current income and long-term growth of capital | |
Non-U.S. Fund | Long-term growth of capital | |
Core Bond Fund | Current income and, as a secondary objective, capital appreciation |
We select the Portfolios offered through this Policy based on several criteria, including asset class coverage, the strength of the investment advisers or sub-advisers reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor we consider during the selection process is whether the Portfolios investment adviser or an affiliate will make payments to us or our affiliates. We review the Portfolios periodically and may remove a Portfolio or limit its availability to new premiums and/or transfers of accumulated amounts if we determine that the Portfolio no longer meets one or more
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of the selection criteria, and/or if the Portfolio has not attracted significant allocations from Owners. The Northwestern Mutual Series Fund, Inc. and the Russell Investment Funds have been included in part because they are managed by subsidiaries of the Company.
We do not provide any investment advice and do not recommend or endorse any particular Portfolio. You bear the risk of any decline in the Policy Value of your Policy resulting from the performance of the Portfolios you have chosen.
Owners, through their indirect investment in the Portfolios, bear the costs of the investment advisory or management fees that the Portfolios pay to their respective investment advisors (see the Portfolios prospectuses for more information). As described above, an investment adviser of a Portfolio, or its affiliates, may make payments to the Company and/or certain of our affiliates. These payments may be derived, in whole or in part, from the advisory fee deducted from Portfolio assets. The amount of the compensation is based on a percentage of assets of the Portfolios attributable to the Policies and certain other variable insurance products that the Company issues. The percentages differ and some investment advisers (or other affiliates) may pay more than others. The percentages currently range up to 0.25%. These payments may be used for any corporate purpose, including payment of expenses that the Company and/or its affiliates incur for services performed on behalf of the Policies and the Portfolios. The Company and its affiliates may profit from these payments.
Certain Portfolios have adopted a Distribution (and/or Shareholder Servicing) Plan under Rule 12b-1 of the 1940 Act, which is described in more detail in the Portfolios prospectuses. These payments, which may be up to 0.25%, are deducted from assets of the Portfolios and are paid to our distributor, Northwestern Mutual Investment Services, LLC. These payments decrease the Portfolios investment return.
Additionally, an investment adviser or sub-adviser of a Portfolio or its affiliate may provide the Company with wholesaling services that assist in the distribution of the Policies and may pay the Company and/or certain of our affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the investment adviser or sub-adviser (or their affiliate) with increased access to persons involved in the distribution of the Policies.
We are no longer issuing this Policy.
This prospectus describes the material provisions of the Policy. Since it is not intended to address all situations, the actual provisions of your Policy will control. You should consult your Policy for more information about its terms and conditions, and for any state specific variations that may apply to your Policy.
Generally, the Policy was available for Insureds between Issue Ages 20-85. A minimum Specified Amount of at least $1,000,000 was required if the older Insureds Issue Age was 20-49 and $500,000 if the older Insureds Issue Age was 50-85.
The Policy permits you to pay premiums at any time before the Policy Anniversary that is nearest the 95th birthday of the younger Insured and in any amounts within the limits described in this section.
We used the Specified Amount you selected when you purchased the Policy to determine the minimum initial premium required to put your Policy in force. The minimum initial premium varies with the Issue Age, sex, and underwriting classification of the Insured persons.
After a Policy is issued, there are no minimum premiums, except that we will not accept a premium of less than $25. The Policy will remain in force during the lifetime of at least one of the Insured persons so long as the Cash Value is sufficient to pay the Monthly Policy Charge.
The Policy sets no maximum on premiums, but we will accept a premium that would increase the net amount at risk only if the insurance, as increased, will be within our issue limits, the Insureds meet our insurability requirements and we receive the premium prior to the Policy anniversary nearest the older Insureds 85th birthday. If you have elected the Guideline Premium/Cash Value Corridor Test (see Death Benefit Minimum Death Benefit), we will not accept a premium if it would disqualify the Policy as life insurance for federal income tax purposes. We will accept a premium, however, even if it would cause the Policy to be classified as a MEC. (See Tax Considerations.)
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You may send Premium Payments to our Home Office or to a payment center designated by us. All payments must be made in U.S. Dollars payable through a U.S. financial institution. We accept Premium Payments by check or electronic funds transfer (EFT). We do not accept third-party checks at the Home Office as part of the initial Premium Payment. We will not accept cash, money orders, travelers checks or starter checks received at the Home Office. If you make a Premium Payment with a check or bank draft and, for whatever reason, it is later returned unpaid or uncollected, or if a Premium Payment by EFT is reversed, we reserve the right to reverse the transaction. We also reserve the right to recover any resulting losses incurred by us by withdrawing a sufficient amount of Policy Value. We have the right to limit or refund a Premium Payment or make distributions from the Policy as necessary to continue to qualify the Policy as life insurance under federal tax law. If mandated under applicable law, we may be required to reject a Premium Payment.
Although we do not anticipate delays in our receipt and processing of premiums, we may experience such delays to the extent premiums are not received at our Home Office on a timely basis. Such delays could result in delays in the allocation of premiums (see Allocations to the Separate Account).
We may also be required to provide information about you and your account to government regulators.
The Policy Value is the cumulative amount invested, less withdrawals, adjusted for investment results and interest on Policy Debt, and reduced by the current monthly charges for the cost of insurance and other expenses.
Death Benefit Options The Death Benefit is payable on the second death while the Policy is in force. The Policy provides for three Death Benefit options:
| Specified Amount (Option A) |
| Specified Amount Plus Policy Value (Option B). See Policy Value above. |
| Specified Amount Plus Premiums Paid (Option C) |
You selected the Specified Amount when you purchased the Policy and, subject to our approval, you may make changes upon written request. Changes will be effective on the first monthly processing date following receipt of your request in our Home Office.
The selected Death Benefit option will be in effect before the Policy Anniversary nearest the 100th birthday of the younger Insured (whether that Insured survived to age 100 or not), and the Death Benefit will be equal to the Policy Value on or after that Policy Anniversary. The investment performance of the Portfolios, as well as the charges and expenses under your Policy, may decrease your Policy Value and/or your Death Benefit.
Death Benefits will be paid on the death of the second of the Insureds to die while the Policy is in force. The amount payable will be reduced by the amount of any Policy Debt. Subject to the terms and conditions of the Policy, the proceeds will be paid to a beneficiary or other payee after proof of the deaths of both Insureds is received in our Home Office. The amount of proceeds will be determined as of the date of the second death. We will pay interest on the proceeds from that date until payment is made.
If the Company pays the death benefit in a lump sum, it will do so by establishing an interest-bearing account, called the Northwestern Access Fund, for beneficiaries in the amount of the death benefit. Account information, along with a book of drafts (which will function like a checkbook), will be sent to the beneficiary, and the beneficiary will have access to funds in the account simply by writing a draft for all or part of the amount of the death benefit (or other available balance), and depositing or using the draft as desired. When the draft is paid through the bank that administers the account for Northwestern Mutual, the bank will receive the amount the beneficiary requests as a transfer from the Companys General Account. The Northwestern Access Fund is part of the Companys General Account. The Northwestern Access Fund is not a bank account, and it is not insured by the FDIC or any other government agency. As part of our General Account, the Northwestern Access Fund is backed by the financial strength of the Company, although it is subject to the claims of our creditors. The Company may make a profit on all amounts held in the Northwestern Access Fund.
If a payment plan was not previously elected by the Owner and in lieu of a lump sum payment, the Company currently permits Death Benefits to be paid under a payment plan selected by your beneficiary after the death of the second Insured to die. Available payment plans include an interest income plan, installment income plans, and life income plans. The Owner may elect the payment plan while at least one of the Insureds is living or, if the second Insured to die is not the Owner, during the first 60 days after the second Insureds date of death. If the Owner fails to elect a payment plan, a beneficiary may elect a payment plan for Death Benefits payable to that beneficiary. A payment plan that is elected by the Owner will take effect on the date of death of the second Insured if the notice of election is received in our Home Office while the Insured is living. In all other cases, the payment plan will take effect on the date of
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receipt of the notice of election. If no payment plan is elected, the benefit is paid to the beneficiary with interest based on rates declared by the Company or as required by applicable state law on the date of death of the second Insured.
Minimum Death Benefit The Minimum Death Benefit is the amount required to maintain the Policy as life insurance for Federal income tax purposes. Under any of the Death Benefit options, or on or after the Policy Anniversary nearest the 100th birthday of the younger Insured, we will increase the Death Benefit if necessary to meet this requirement.
A Policy must satisfy one of two testing methods to qualify as life insurance for federal income tax purposes: the Guideline Premium/Cash Value Corridor Test or the Cash Value Accumulation Test. Both tests require the Policy to meet minimum ratios, or multiples, of Death Benefit to the Policy Value. The minimum multiple decreases as the age of the Insured persons advances. You made the choice of testing methods when you purchased the Policy and it may not be changed.
For the Guideline Premium/Cash Value Corridor Test the minimum multiples of Death Benefit to the Policy Value are shown in the following table. The Attained Age of the younger Insured is used even if the younger Insured is no longer living.
Guideline Premium/Cash Value
Corridor Test Multiples
Younger Insured Age
Attained Age |
Policy Value % |
Attained Age |
Policy Value % | |||||
40 or under |
250 | 61 | 128 | |||||
41 |
243 | 62 | 126 | |||||
42 |
236 | 63 | 124 | |||||
43 |
229 | 64 | 122 | |||||
44 |
222 | 65 | 120 | |||||
45 |
215 | 66 | 119 | |||||
46 |
209 | 67 | 118 | |||||
47 |
203 | 68 | 117 | |||||
48 |
197 | 69 | 116 | |||||
49 |
191 | 70 | 115 | |||||
50 |
185 | 71 | 113 | |||||
51 |
178 | 72 | 111 | |||||
52 |
171 | 73 | 109 | |||||
53 |
164 | 74 | 107 | |||||
54 |
157 | 75-90 | 105 | |||||
55 |
150 | 91 | 104 | |||||
56 |
146 | 92 | 103 | |||||
57 |
142 | 93 | 102 | |||||
58 |
138 | 94 | 101 | |||||
59 |
134 | 95 or over | 100 | |||||
60 |
130 |
For the Cash Value Accumulation Test, the minimum multiples of Death Benefit to the Policy Value are calculated using net single premiums based on the Attained Age of both Insureds and the Policys underwriting classification, and using a 4% interest rate.
The Guideline Premium/Cash Value Corridor Test generally has lower minimum multiples than the Cash Value Accumulation Test, usually resulting in better Cash Value accumulation for a given amount of premium and Specified Amount. This is because the Guideline Premium/Cash Value Corridor Test generally requires a lower Death Benefit and therefore a lower cost of insurance charge. The Guideline Premium/Cash Value Corridor Test limits the amount of premium that may be paid in each Policy Year. The Cash Value Accumulation Test has no such annual limitation, and allows more premium to be paid during the early Policy Years.
Death Benefit Changes You may change the Death Benefit option, or increase or decrease the Specified Amount, subject to our approval. Changes are subject to insurability requirements and issue limits. We will not permit a change if it results in a Specified Amount less than what we would issue on that date for similar policies.
A change in the Death Benefit option, or an increase or decrease in the Specified Amount, will be effective on the monthly processing date next following receipt of a written request at our Home Office.
Administrative charges of up to $250 for a change in the Death Benefit option, and up to $25 per change for more than one change in the Specified Amount in a Policy Year, may apply. We will deduct any such charges from the Policy Value. We are currently waiving these charges.
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A change in the Death Benefit option, or an increase or decrease in the Specified Amount, may have important tax effects. (See Tax Considerations.) The cost of insurance charge will increase if a change results in a larger net amount at risk. (See Charges against the Policy Value.)
Allocations to the Separate Account
Net Premiums are placed in the Separate Account on the date we receive them at our Home Office, provided the Net Premiums are received in good order prior to the close of trading (typically, 4:00 pm Eastern Time) on the New York Stock Exchange (NYSE) for that day. Good order means that your request meets all the requirements necessary for us to process it, including, but not limited to, its insurability, underwriting, and MEC-limit (or life insurance qualification) requirements. We will process these premiums based upon the value of the units in the Divisions of the Separate Account as of the close of the regular trading session of the NYSE. If we receive the premiums on or after the close of trading, we will process the premiums using the value of the units in the Divisions determined at the close of the next regular trading session of the NYSE. Net Premiums are premiums less the Premium Expense Charge. (See Premium Expense Charges.) Net Premiums are allocated into the Divisions as you directed in the application for your Policy or in subsequent written requests. You may change the allocation for future Net Premiums at any time by written request and the change will be effective for premiums we place in the Separate Account thereafter.
Transfer Between Divisions Subject to the short-term and excessive trading limitations described below, you may change your allocation between Divisions and transfer accumulated amounts from one Division to another. In order to take full advantage of these features, you should carefully consider, on a continuing basis, which investment options are best suited to your long-term investment needs. See Owner Inquiries for more information on how you may change your allocation among Divisions. Your Financial Representative may provide us with instructions on your behalf involving the allocation and transfer of accumulated amounts among available Divisions, subject to our rules and requirements, including the restrictions on short-term and excessive trading discussed below.
We will make the transfer based upon the net valuation of units in the affected Division after our receipt of your request for transfer at our Home Office, provided it is in good order. Good order means that your request meets all the requirements necessary for us to process it. You may request the transfer in writing (including via facsimile, or, under limited circumstances, by e-mail) at our Home Office or, if eligible, via our website (www.nmfn.com). The submission of transfer instructions through our website (Electronic Instructions) must be made in accordance with our current procedures for Electronic Instructions. However, we are not required to accept Electronic Instructions, and we will not be responsible for losses resulting from transactions based on unauthorized Electronic Instructions, provided we follow procedures reasonably designed to verify the authenticity of Electronic Instructions. Please note that electronic devices may not always be available. Any electronic device, whether it is yours, your service providers or your agents or ours, can experience outages or slowdowns for a variety of reasons, which may delay or prevent our processing of your request. Although we have taken precautions to limit these problems, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your transfer request by writing to our Home Office. Transfer requests made via email are deemed to be received by us upon receipt at the electronic location designated by us in our procedures. We reserve the right to limit, modify, suspend or terminate the ability to make transfers via Electronic Instructions. Currently we do not accept transfer instructions by telephone.
If we receive your request in good order for transfer before the close of trading on the NYSE (typically, 4:00 pm Eastern Time), your request will receive same-day pricing. If we receive your request for transfer on or after the close of trading on the NYSE, we will process the order using the value of the units in the Divisions determined at the close of the next regular trading session of the NYSE. Although no fee is presently charged, we reserve the right where allowed by state law to charge a fee that will cover the administrative costs of transfers. In addition, certain Portfolios in which the Divisions invest may impose redemption fees. These fees are described in the Portfolios prospectuses.
Short-Term and Excessive Trading Short-term and excessive trading (sometimes referred to as market timing) may present risks to a Portfolios long-term investors, such as Owners and other persons who may have material rights under the Policy (e.g., beneficiaries), because it can, among other things, disrupt Portfolio investment strategies, increase Portfolio transaction and administrative costs, require higher than normal levels of cash reserves to fund unusually large or unexpected redemptions, and adversely affect investment performance. These risks may be greater for Portfolios that invest in securities that may be more vulnerable to arbitrage trading including foreign securities and thinly traded securities, such as small cap stocks and non-investment grade bonds. These types of trading activities also may dilute the value of long-term investors interests in a Portfolio if it calculates its net asset value using closing prices that are no longer accurate. Accordingly, we discourage market timing activities.
To deter short-term and excessive trading, we have adopted and implemented policies and procedures which are designed to control abusive trading practices. We seek to apply these policies and procedures uniformly to all Owners. Any exceptions must be either expressly permitted by our policies and procedures or subject to an approval process described in them. We may also be prevented
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from uniformly applying these policies and procedures under applicable state or federal law or regulation. Because exceptions are permitted, it is possible that investors may be treated differently and, as a result, some may be allowed to engage in trading activity that might be viewed as market timing.
Among the steps we have taken to reduce the frequency and effect of these practices are monitoring trading activity and imposing trading restrictions, including the prohibition of more than twelve transfers among Divisions under a single Policy during a Policy Year. Further, an investor who is identified as having made a transfer in and out of the same Division, excluding the Money Market Division, (round trip transfer) in an amount in excess of $10,000 within fourteen calendar days will be restricted from making additional transfers after the third such round trip transfer until the next Policy Anniversary date, and sent a letter informing him or her of the restriction. Thereafter, the same investor will be similarly restricted after the second such round trip transfer. An Owner who is identified as having made one or more round trip transfers within thirty calendar days aggregating more than one percent (1%) of the total assets of the Portfolio underlying a Division, excluding the Money Market Division, will be sent a warning letter after the first such round trip transfer and will be restricted from making additional transfers until the next Policy Anniversary date after the second such round trip transfer. Thereafter, the same investor will be similarly restricted after the first such round trip transfer. These limitations do not apply to automatic asset transfers, scheduled or systematic transactions involving portfolio rebalancing, dollar cost averaging, initial allocations or changes in future allocations. Once a Policy is restricted, we will allow one additional transfer into the Money Market Division until the next Policy Anniversary.
Policies such as yours (or other Policies supported by the Separate Account) may be purchased by a corporation or other entity as a means to informally fund the liabilities created by the entitys employee benefit or similar plan. These Policies may be aggregately managed to match liabilities under such plans. Policies sold under these circumstances may be subject to special transfer restrictions. Namely, transactions involving portfolio rebalancing programs may be exempt from the twelve transfers per Policy year limitation where: (1) the purpose of the portfolio rebalancing program is to match the Policy to the entitys employee benefit or similar plan; (2) the portfolio rebalancing program adequately protects against short-term or excessive trading; and (3) the portfolio rebalancing program is managed by a third party administrator that meets our requirements. We reserve the right to monitor or limit transactions involving portfolio rebalancing programs where we believe such transactions may be potentially harmful to a Portfolio.
We may change these policies and procedures from time to time in our sole discretion without notice; provided, however, Owners will be given advance, written notice if the policies and procedures are revised to accommodate market timing. Additionally, the Funds may have their own policies and procedures described in their prospectuses that are designed to limit or restrict frequent trading. Such policies may be different from our policies and procedures, and may be more or less restrictive. As the Funds may accept purchase payments from other investors, including other insurance company separate accounts on behalf of their variable product customers and retirement plans, we cannot guarantee that the Funds will not be harmed by any abusive market timing activity relating to the retirement plans and/or other insurance companies that may invest in the Funds. The Funds policies and procedures may provide for the imposition of a redemption fee and, upon request from the Fund, require us to provide transaction information to the Fund (including an Owners tax identification number) and to restrict or prohibit transfers and other transactions that involve the purchase of shares of a Portfolio. In the event a Fund instructs us to restrict or prohibit transfers or other transactions involving shares of a Portfolio, you may not be able to make additional purchases in a Division until the restriction or prohibition ends. If you submit a request that includes a purchase or transfer into such a restricted Division, we will consider the request not in good order and it will not be processed. You may, however, submit a new transfer request.
If we believe your trading activity is in violation of, or inconsistent with, our policies and procedures or otherwise is potentially disruptive to the interests of other investors, you may be asked to stop such activities and future investments, and allocations or transfers by you may be rejected without prior notice. Because we retain discretion to determine what action is appropriate in a given situation, investors may be treated differently and some may be allowed to engage in activities that might be viewed as market timing.
We intend to monitor events and the effectiveness of our policies and procedures in order to identify whether instances of potentially abusive trading practices are occurring. However, we may not be able to identify all instances of abusive trading practices, nor completely eliminate the possibility of such activities, and there may be technological limitations on our ability to impose restrictions on the trading practices of Owners.
Premium Expense Charges We deduct a charge from each premium for state premium taxes and a portion of our federal income taxes. Premium taxes vary from state to state and currently range from 0.0% to 3.5% of life insurance premiums. We will charge 2.35% regardless of the state in which you live.
Due to a 1990 federal tax law change under the Omnibus Budget Reconciliation Act of 1990 (OBRA), as amended, insurance companies are generally required to capitalize and amortize certain acquisition expenses rather than currently deducting such expenses. Due to this capitalization and amortization, the corporate income tax burden on insurance companies has been affected. We
13
make a charge of up to 1.25% against each premium payment to compensate us for corporate taxes. We believe that this charge does not exceed a reasonable estimate of an increase in our federal income taxes resulting from a change in the Internal Revenue Code relating to deferred acquisition costs. The state premium tax charge and the OBRA expense charge may each vary in amount.
We deduct a sales load from each premium. We expect to recover our expenses of selling and advertising (distribution expenses) from this amount. The charge is 6.4% of the premiums up to the Target Premium paid for the first ten Policy Years, and 2.4% of all other premiums. The amounts we deduct for costs in a Policy Year are not specifically related to distribution expenses incurred in that year. To the extent that distribution expenses exceed the amounts deducted, we will pay the expenses from our other assets. These assets may include, among other things, any gain realized from the monthly charge against the Policy Value for the mortality and expense risks we have assumed, as described below. To the extent that the amounts deducted for distribution expenses exceed the amounts needed, we will realize a gain.
Charges Against the Policy Value We deduct a Monthly Policy Charge from the Policy Value on each monthly processing date. (See Policy Value.) The Monthly Policy Charge includes (1) the Cost of Insurance Charge, (2) the Mortality and Expense Risk ChargeInvested Assets Component, (3) the Mortality and Expense Risk ChargeSpecified Amount Component, (4) the Administrative Charge, (5) the Underwriting and Issue Charge, (6) the Deferred Sales Charge and (7) the charge for the expenses and taxes associated with any Policy Debt. These seven components of the Monthly Policy Charge are described in the following seven paragraphs.
As part of the Monthly Policy Charge, we deduct the Cost of Insurance Charge from the Policy Value on each monthly processing date. We determine the amount by multiplying the net amount at risk by the cost of insurance rate. The net amount at risk is the difference between the Death Benefit and the Policy Value. The net amount at risk will be affected by investment performance, the amount and timing of premiums, and the charges and expenses for the Policy. The cost of insurance rate reflects the Policy Date, Policy Year, and the Issue Age, sex and underwriting classification of the Insured persons. All things being equal, higher Issue Ages and/or worse underwriting classifications will result in higher cost of insurance rates, and men will pay higher rates than women. In addition, cost of insurance rates will generally increase each Policy Year. The maximum cost of insurance rates are included in the Policy. We may realize gain from this charge to the extent the charge exceeds our costs attributable to the charge, in which case the gain may be used for any Company purpose.
As part of the Monthly Policy Charge, we also deduct from the Policy Value the Mortality and Expense Risk Charge-Invested Assets Component. The maximum amount of the Invested Assets component is equal to an annual rate of 0.90% (0.075% monthly rate) of the Policy Value, less any Policy Debt. Currently the charge is equal to an annual rate of 0.10% (0.00833% monthly rate) of the Policy Value, less any Policy Debt. The mortality risk is that Insureds may not live as long as we estimated. The expense risk includes the risk that expenses of issuing and administering the Policies may exceed the estimated costs, including other costs such as those related to marketing and distribution. We will realize a gain from this charge to the extent it is not needed to provide benefits and pay expenses under the Policies, in which case the gain may be used for any Company purpose.
As part of the Monthly Policy Charge, we deduct from the Policy Value the Mortality and Expense Risk ChargeSpecified Amount Component. The Specified Amount component is based on the initial Specified Amount and the Issue Ages of the Insured persons, and applies during the first 10 Policy Years. The range on an annual basis is from $0.04 per $1,000 of initial Specified Amount if both Insured persons are Issue Age 25 or younger, up to $1.72 per $1,000 of initial Specified Amount if both Insured persons are issue age 72 or older. A table of rates and an example are included in Appendix A. The mortality risk is that Insureds may not live as long as we estimated. The expense risk includes the risk that expenses of issuing and administering the Policies may exceed the estimated costs, including other costs such as those related to marketing and distribution. We will realize a gain from this charge to the extent it is not needed to provide benefits and pay expenses under the Policies, in which case the gain may be used for any Company purpose.
As part of the Monthly Policy Charge, we deduct the Administrative Charge of not more than $7.50 monthly. Currently this charge is $5 monthly. This charge is for administrative expenses, including costs of premium collection, processing claims, keeping records and communicating with Owners. We do not expect to profit from this charge.
As part of the Monthly Policy Charge, we deduct the Underwriting and Issue Charge based on the initial Specified Amount and the underwriting classification of the Insureds on the Date of Issue. This charge applies during the first 10 Policy Years. The range is from $0.015 to $0.035 per $1,000 of initial Specified Amount, with a maximum monthly charge of $75 to $175.
As part of the Monthly Policy Charge, we deduct the Deferred Sales Charge. The charge is 7.5% (0.625% monthly rate) of cumulative premiums paid during the first Policy Year (up to the Target Premium). The charge applied during Policy Years 2-10 is equal to 0.625% per month times the cumulative premium paid in the first Policy Year (up to the Target Premium). This charge is for sales expenses.
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As part of the Monthly Policy Charge, we deduct a charge for the expenses and taxes associated with the Policy Debt, if any. The aggregate charge is at the current annual rate of 0.90% (0.075% monthly rate) of the Policy Debt for the first 10 Policy Years and 0.35% (0.02917% monthly rate) thereafter.
The Policy provides for transaction fees to be deducted from the Policy Value on the dates on which transactions take place. These charges are $25 per change for more than one change in the Specified Amount in a Policy Year, $25 per withdrawal, and $25 per transfer of assets among the Divisions if more than twelve transfers take place in a Policy Year. The fee for a change in the Death Benefit option is $250. Currently we are waiving all of these fees.
You may have the option of receiving funds via wire transfer or priority mail. A fee of $25 is charged for wire transfers (up to $50 for international transfers) and a $15 fee is charged for priority mail. These fees may increase in order to cover our administrative or other expenses.
We will apportion deductions from the Policy Value among the Divisions in proportion to the amounts invested in the Divisions.
Surrender Charge A surrender charge will be deducted from the Policy proceeds during the first ten Policy Years if the Policy is surrendered. The surrender charge during the first Policy Year is 50% of the Premium Payments paid up to the Target Premium. Beginning with the second Policy Year, the surrender charge decreases by a consistent dollar amount month by month to zero at the end of the tenth Policy Year. The Target Premium, and therefore the maximum surrender charge, depends on the Issue Age, sex and underwriting classification of the Insured persons. For example, for a male and female, both in the best underwriting classification and both Issue Age 55, the maximum surrender charge, where the Target Premium or more is paid and the Policy is surrendered during the first Policy Year, would be $9.29 per $1,000 of initial Specified Amount. The surrender charge will never exceed $50 per $1,000 of initial Specified Amount for any Issue Age, sex and underwriting classification combination. No surrender charge applies to a withdrawal of Cash Value.
Expenses of the Portfolios The investment performance of each Division reflects all expenses borne by the corresponding Portfolio. (See Fee and Expense TablesAnnual Portfolio Operating Expenses and the attached Fund prospectuses.)
You may surrender a Policy for the Cash Value at any time during the lifetime of at least one of the Insured persons. The Cash Value for the Policy will change daily in response to investment results. No minimum Cash Value is guaranteed. The Cash Value is equal to the Policy Value, reduced by the surrender charge and reduced by any Policy Debt outstanding.
We determine the Cash Value for a Policy at the end of each valuation period (typically, 4:00 pm Eastern Time each business day). Each business day, together with any non-business days before it, is a valuation period. A business day is any day on which the NYSE is open for trading. In accordance with the requirements of the 1940 Act, we may also determine the Cash Value for a Policy on any other day on which there is sufficient trading in securities to materially affect the value of the securities held by the Portfolios.
The Company currently permits surrender proceeds to be paid under a payment plan requested by an Owner at the time of surrender. Available payment plans include an interest income plan, installment income plans, and life income plans.
Described below are certain terms and conditions that apply when you borrow amounts under the Policy. For information on the tax treatment of loans, see Tax Considerations and consult with your tax advisor.
You may borrow an amount that, when added to existing Policy Debt, is not more than the loan value. The loan value is 90% of the sum of the Cash Value and any existing Policy Debt on the date of the loan. If a Policy loan is already outstanding, the maximum amount for any new loan is reduced by the amount already borrowed. We normally pay the loan proceeds within seven days after we receive a proper loan request at our Home Office. We may postpone payments of loans under certain conditions described in the Deferral of Determination and Payment section of this prospectus.
Written requests will be processed based on the date and time they are received in the Home Office, provided the request is received in good order. Based on our administrative procedures, you may have the option of receiving funds via wire transfer or priority mail, and we may charge a fee for this service to cover our administrative costs.
Interest on a Policy loan accrues and is payable on a daily basis at an annual effective rate of 5%. We add unpaid interest to the amount of the loan. If, on any monthly processing date, the amount of the loan plus the surrender charge plus the monthly charges for the cost of insurance and other expenses exceeds the Policy Value, the Policy will enter the grace period. (See Termination and
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Reinstatement.) We will send you a notice at least 61 days before the termination date. The notice will show how much you must pay to keep the Policy in force.
We will take the amount of a Policy loan from the Divisions in proportion to the amounts in the Divisions. We will transfer the amounts withdrawn to our General Account and credit them on a daily basis with an annual earnings rate equal to the 5% Policy loan interest rate. A Policy loan, even if you repay it, will have a permanent effect on the Policy Value because the amounts borrowed will not participate in the Separate Accounts investment results while the loan is outstanding. The effect may be either favorable or unfavorable depending on whether the earnings rate credited to the loan amount is higher or lower than the investment performance of the unborrowed amounts left in the Divisions.
The Death Benefit will also be reduced by the amount of any Policy Debt outstanding. If you surrender or exchange the Policy or allow it to lapse while Policy Debt is outstanding, the amount of the loan, to the extent it has not previously been taxed, will be considered as an amount you received and taxed accordingly.
You may repay a Policy loan, and any accrued interest outstanding, in whole or in part, at any time during the lifetime of at least one of the Insured persons. If we receive a payment without specific instructions, we will first apply the payment to any outstanding charges, with any remaining amount being applied to any outstanding loans. Any amount remaining thereafter will be applied as a Premium Payment. If we receive your payment before the close of trading on the NYSE, we will credit payments as of the date we receive them and we will transfer those amounts from our General Account to the Divisions, in proportion to the premium allocation in effect, as of the same date. If we receive your payment on or after the close of trading on the NYSE, we will process the order using the value of the units in the Divisions determined at the close of the next regular trading session of the NYSE. A Policy loan or unpaid interest may have important tax consequences. (See Tax Considerations.)
You may make a withdrawal of Policy Value. A withdrawal may not reduce the loan value to less than any Policy Debt outstanding. The loan value is 90% of the sum of the Cash Value and any existing Policy Debt on the date of the loan. The withdrawal amount may not reduce the Specified Amount to less than the minimum amount we would issue at the time of withdrawal. Following a withdrawal the remaining Policy Value must be at least three times the current monthly charges for the cost of insurance and other expenses. The minimum amount for withdrawals is $250. We permit up to four withdrawals in a Policy Year. An administrative charge of up to $25 may apply, but we are currently waiving this charge.
A withdrawal of Policy Value decreases the Death Benefit, and may also decrease the Specified Amount. The decrease depends on the Death Benefit option and the size of any prior increases in Death Benefit required to meet the definitional requirements for life insurance for federal income tax purposes. In some situations the Death Benefit will decrease by more than the amount of the withdrawal.
We will take the amount withdrawn from Policy Value from the Divisions in proportion to the amounts in the Divisions. The Policy makes no provision for repayment of amounts withdrawn. A withdrawal of Policy Value may have important tax consequences. (See Tax Considerations.)
If the Cash Value is less than the monthly charges for the cost of insurance and other expenses on any monthly processing date, we allow a grace period of 61 days for a premium payment to keep the Policy in force. The grace period begins on the date we send you a notice. The notice will state the minimum amount of premium required to keep the Policy in force and the date by which you must pay the premium. The Policy will terminate with no value unless you pay the required amount before the grace period expires.
After a Policy has terminated, you may reinstate it within three years (or longer if required under state law) following the termination date, subject to our approval and satisfaction of our underwriting requirements. To reinstate the Policy, you must make a payment equal to an amount that will cover all Monthly Policy Charges that were due and unpaid before the end of the grace period and three times the Monthly Policy Charge due on the effective date of the reinstatement. If we approve the application for reinstatement, the effective date of the reinstated Policy will be the monthly processing date next following the receipt of the application at our Home Office. The Policy may not be reinstated if either of the Insureds died after the end of the grace period.
The Policy Value when a Policy is reinstated is equal to the premium paid (plus applicable interest, if any), less Premium Expense Charges, plus any Policy Debt, less the sum of all monthly charges for the cost of insurance and other expenses that were due and unpaid before the end of the grace period, less the monthly charges due on the effective date of the reinstatement. We will allocate the Policy Value, less any Policy Debt, among the Divisions based on the allocations for premiums currently in effect.
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If a surrender charge was assessed at the time of termination, the Policy Value when a Policy is reinstated will include a credit for such surrender charge. The same surrender charge schedule in your Policy will apply upon reinstatement.
A reinstatement may have important tax consequences. If you contemplate any such transaction you should consult a qualified tax adviser.
Reinvestments after Surrender or Withdrawal
While Owners have no right to reinvestment after a surrender or withdrawal, we may, at our sole discretion, permit such reinvestments as described in this paragraph. In special limited circumstances, we may allow payments into the Policy in the form of returned surrender or withdrawal proceeds in connection with a request to void a surrender or withdrawal if the request is received by the Company within a reasonable time after the surrender or withdrawal proceeds are mailed. These payments may be processed with a refund of any surrender charge or withdrawal fee previously assessed at the time of surrender or withdrawal and without a sales load. The period for which we will accept requests for the return of surrender or withdrawal proceeds after a surrender may vary in accordance with our administrative procedures. The returned surrender or withdrawal proceeds will be reinvested at the unit value next determined for each Division after our receipt of the reinvestment request in good order at our Home Office, including, among other things, the return of surrender or withdrawal proceeds, satisfactory evidence of insurability and any premium due. Proceeds will be applied to the same Divisions from which the surrender or withdrawal was made. Depending on the Insureds underwriting classification, we may not accept the reinvestment or we may accept the reinvestment with different charges and expenses under the Policy. We may refuse to process reinvestments where it is not administratively feasible. Decisions regarding requests for reinvestment will take into consideration differences in costs and services and will not be unfairly discriminatory. Policies with reinvested surrender or withdrawal proceeds will have the same Death Benefit, Policy Value and surrender charge schedule as if the proceeds had not been surrendered or withdrawn, except that values will reflect the fact that amounts were not invested in the Separate Account during the period of time the surrender or withdrawal proceeds were not in the Policy as well as any changes in charges and expenses due to a change in underwriting classification. We will make an adjustment for any Policy Debt or the debt may be reinstated.
Right to Exchange for a Fixed Benefit Policy
You may exchange a Policy for a life insurance policy with benefits that do not vary with the investment experience of the Separate Account (Fixed Benefit Policy). You may elect the exchange at any time within twelve months (or longer if required by state law) after the issue date of the Policy provided premiums are duly paid. We reserve the right to require evidence of insurability. The Fixed Benefit Policy will be on the lives of the same Insureds and will have the same initial guaranteed Death Benefit, Policy Date and Issue Ages. The exchange will be subject to an equitable cash adjustment, which will recognize the investment performance of the Policy through the effective date of the exchange, and may have tax consequences. An exchange will be effective when we receive a proper written request, as well as the Policy, and any amount due on the exchange. As part of the exchange, Invested Assets will be transferred to the General Account. We may modify or terminate this accommodation at any time, with or without notice.
In addition, you may exchange a Policy for a Fixed Benefit Policy if, at any time, any of the Portfolios changes its investment adviser or if there is a material change in the investment policies of a Portfolio. You will be given notice of any such change and will have 60 days to make the exchange.
Any Policy change that you request is subject to our then current insurability and processing requirements. Processing requirements may include, for example, completion of certain forms and satisfying certain evidentiary requirements.
If the Policy is changed or modified, we may make appropriate endorsements to the Policy, and we may require you to send your Policy to our Home Office for endorsement. Any modification or waiver of our rights or requirements under the Policy must be in writing and signed by an officer of the Company. No agent or other person may bind us by waiving or changing any provision contained in the Policy.
Upon notice to you, we may modify the Policy:
| to conform the Policy, our operations, or the Separate Accounts operations to the requirements of any law (including any regulation issued by a government agency) to which the Policy, the Company, or the Separate Account is subject; |
| to assure continued qualification of the Policy as a life insurance contract under the federal tax laws; |
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or
| to reflect a change in the Separate Accounts operation. |
Owner The Owner is identified in the Policy. The Owner may exercise all rights under the Policy while at least one of the Insured persons is living. Ownership may be transferred to another. We must receive a written proof of the transfer at our Home Office. You in this prospectus means the Owner or prospective purchaser of a Policy. Generally, only Owners are entitled to important information about the Policy. Other persons, such as beneficiaries or payors, are entitled to only limited information.
Beneficiary The beneficiary is the person to whom the Death Benefit is payable. The beneficiary is named in the application. You may change the beneficiary in accordance with the Policy provisions.
Incontestability We will not contest a Policy after it has been in force during the lifetime of at least one Insured for two years from the Date of Issue or two years from the effective date of a reinstatement. We will not contest an increase in the amount of insurance that was subject to insurability requirements after the increased amount has been in force during the lifetime of at least one Insured for two years from the date of issuance of the increase.
Suicide If either Insured dies by suicide within one year from the Date of Issue, the Policy will terminate and the amount payable under the Policy will be limited to the premiums paid, less the amount of any Policy Debt and withdrawals. If either Insured dies by suicide within one year of the date of an increase in the amount of insurance, which was subject to insurability requirements, the amount payable with respect to the increase will be limited to the Monthly Policy Charges attributable to the increase.
Misstatement of Age or Sex If the age or sex of either of the Insureds has been misstated, the Death Benefit and Policy Value will be modified by recalculating all Monthly Policy Charges based on the correct age and sex of both Insured persons.
Collateral Assignment You may assign a Policy as collateral security. We are not responsible for the validity or effect of a collateral assignment and will not be deemed to know of an assignment before receipt of the assignment in writing at our Home Office.
Deferral of Determination and Payment We will ordinarily pay Policy benefits within seven days after we receive all required documents at our Home Office. However, we may defer determination and payment of benefits during any period when it is not reasonably practicable to value securities because the NYSE is closed, or the SEC, by order, either has determined that an emergency exists or permits deferral of the determination and payment of benefits for the protection of Owners.
If you have submitted a check or draft to our Home Office, we have the right to defer payment of surrender, withdrawal, Death Benefit or loan proceeds or payment plan benefits until the check or draft has been honored.
If mandated under applicable law, we may be required to block an Owners account and thereby refuse to pay any requests for transfer, withdrawal, surrender, loans, or Death Benefits, until instructions are received from the appropriate regulator. We may also be required to provide additional information about an Owner and an Owners account to government regulators.
Dividends This Policy is eligible to share in the divisible surplus, if any, of the Company. This divisible surplus is determined each year. The Policys share, if any, will be credited as a dividend on the Policy Anniversary. Decisions concerning the amount and appropriate allocation of divisible surplus are within the sole discretion of the Companys Board of Trustees. There is no guaranteed method or formula for the determination of divisible surplus. Even if there is a divisible surplus, the payment of a dividend on the Policy is not guaranteed. It is not expected that any dividends will be payable on this Policy.
We will pay annual dividends, if any, in cash or you may use them to increase the Policy Value. If you do not provide direction as to the use of dividends, we will use them to increase the Policy Value. Dividends used to increase the Policy Value will be allocated to the Divisions of the Separate Account according to the allocation of Net Premiums then in effect.
As long as the Separate Account continues to be registered as a unit investment trust under the 1940 Act, and as long as Separate Account assets of a particular Division are invested in shares of a given Portfolio, we will vote the shares of that Portfolio held in the Separate Account in accordance with instructions we receive from Owners. Periodic reports relating to the Portfolios, proxy material, and a form on which one can give instructions with respect to the proportion of shares of the Portfolio held in the Separate Account corresponding to the Owners Policy Value, will be made available to the Owner(s). We will vote shares for which no instructions have been received and shares held in our General Account in the same proportion as the shares for which instructions have been
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received from Owners. The effect of such proportional voting is that a small number of Owners may control the outcome of a particular vote.
Substitution of Fund Shares and Other Changes
If, in our judgment, a Portfolio or Fund becomes unsuitable for continued use with the Policies because of a change in investment objectives or restrictions, shares of another Portfolio or Fund or another mutual fund may be substituted. Any substitution of shares will be subject to any required approval of the SEC, the Wisconsin Commissioner of Insurance or other regulatory authority. We have also reserved the right, subject to applicable federal and state law, to operate the Separate Account or any of its Divisions as a management company under the 1940 Act, or in any other form permitted, or to terminate registration of the Separate Account if registration is no longer required, and to change the provisions of the Policies to comply with any applicable laws.
In the event we take any of these actions, we may make an appropriate endorsement of your Policy and take other actions to carry out what we have done.
Reports and Financial Statements
At least once each Policy Year you will receive a statement showing the Death Benefit, Cash Value, Policy Value and any Policy loan, including loan interest. We will also send you a confirmation statement when you transfer among Divisions, make a withdrawal, take a Policy loan, or surrender the Policy. These statements will show your apportioned amounts among the Divisions.
Annually, we will send you a report containing financial statements of the Separate Account and, semi-annually, we will send you reports containing financial information and schedules of investments for the Portfolios underlying the Divisions to which your Invested Assets are allocated. The financial statements of Northwestern Mutual appear in the Statement of Additional Information. To receive a copy of the Annual Report, Semi-Annual Report and/or the Statement of Additional Information containing such financial statements, call 1-888-455-2232.
To reduce costs, we may send only a single copy of prospectuses and reports to each consenting household (rather than sending copies to each Policy Owner residing in a household). If you are or become a member of such a household, you can revoke your consent to householding at any time, and can begin receiving your own copy of prospectuses and reports by calling us at 1-888-455-2232.
Northwestern Mutual, like other life insurance companies, is ordinarily involved in litigation. Although the outcome of any litigation cannot be predicted with certainty, we believe that, as of the date of this prospectus, there are no pending or threatened lawsuits that will have a materially adverse impact on the ability of Northwestern Mutual to meet its obligations under the Policy, on the Separate Account, or on Northwestern Mutual Investment Services, LLC, the principal underwriter for the Separate Account, and its ability to perform its duties as underwriter for the Separate Account.
With your ID and password, you can visit our website (www.nmfn.com ) to access fund performance information, forms for routine service, and daily Policy and unit values for Policies you own. Eligible Owners may also transfer accumulated amounts among Divisions and change the allocation of future contributions online. For enrollment information, please visit our website (www.nmfn.com). If you have questions about making a surrender, please call your Financial Representative or the Advanced Business Services Center at 1-866-464-3800 between 7:30 am and 5:00 pm Central Time Monday-Friday. To file a claim, please call your Financial Representative or Life Benefits at 1-800-635-8855.
Automatic Dollar-Cost Averaging
With Dollar-Cost Averaging, you can arrange to have a regular amount of money (either a fixed dollar amount or a fractional amount) automatically transferred monthly from the Money Market Division into the Division(s) you have chosen. Transfers will end either when the amount in the Money Market Division is depleted or when you submit the appropriate form to our Home Office to stop such transfers, whichever is earlier. There is no charge for the Dollar-Cost Averaging. We reserve the right to modify or terminate the Dollar-Cost Averaging Plan at any time.
Dollar-cost averaging does not assure a profit or protect against loss in a declining market. Carefully consider your willingness to continue payments during periods of low prices.
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Portfolio rebalancing helps you to maintain over time your allocations among the Divisions you have chosen. If you elect portfolio rebalancing, in accordance with our procedures, your Invested Assets are periodically rebalanced in accordance with our procedures to return your allocation to the percentages you specify. Portfolio rebalancing may reduce the amount of Policy Value allocated to better performing Divisions.
You may choose to rebalance monthly, quarterly, semi-annually or annually. We do not charge a transfer fee for portfolio rebalancing. You may have elected portfolio rebalancing in the Application. You may also elect portfolio rebalancing and modify or terminate your election at any time by submitting a written request to our Home Office. If you make transfers through our website, your portfolio rebalancing will end and you will need to make a new election if you want portfolio rebalancing to continue. We may modify, limit, suspend or discontinue this feature at any time.
Allocation models may be offered. Each model is comprised of a combination of Portfolios representing various asset classes. The models are static or fixed allocation models that do not change. We do not provide investment advice regarding whether a model should be revised or whether it remains appropriate to invest in accordance with any particular model due to performance, a change in your investment needs or for other reasons. Please note that investment according to an allocation model may result in an increase in assets allocated to Portfolios managed by an affiliated investment adviser, and therefore a corresponding increase in Portfolio management fees collected by such adviser. We reserve the right to modify, suspend or terminate the models at any time.
Your Northwestern Mutual Financial Representative will provide you an illustration for your Policy upon your request. The illustrations show how the Death Benefit and Cash Value for a Policy would vary based on hypothetical investment results. The illustrations will be based on the information you give us about the Insured persons and will reflect such factors as the Specified Amount, Death Benefit option and premium payments that you select. These should be based upon realistic expectations given your own individual situation.
Illustrations for variable life insurance policies do not project or predict investment results. The illustrated values assume that non-guaranteed elements such as policy charges and level investment returns will not change. Given the volatility of the securities markets over time, the illustrated scenario is unlikely to occur and the Policys actual Cash Value, Death Benefit, and certain expenses (which will vary with the investment performance of the Portfolios) will be more or less than those illustrated. In addition, the actual timing and amounts of payments, deductions, expenses and any values removed from the Policy will also impact product performance. Due to these variations, even a Portfolio that averaged the same return as illustrated will produce values which will be more or less than those which were originally illustrated.
General The following discussion provides a general description of federal income tax considerations relating to your Policy. The discussion is based on current provisions of the Internal Revenue Code (Code) as currently interpreted by the Treasury and the Internal Revenue Service (IRS). We do not intend this discussion as tax advice. The discussion is not exhaustive, it does not address the likelihood of future changes in federal income tax law or interpretations thereof, and it does not address state or local tax considerations which may be significant in the purchase and ownership of a Policy.
This tax discussion is intended to describe the tax consequences associated with your Policy. It does not constitute legal or tax advice, and is not intended to be used and cannot be used to avoid any penalties that may be imposed on a taxpayer. Taxpayers should seek advice based on their particular circumstances from an independent tax advisor.
Life Insurance Qualification Section 7702 of the Code defines life insurance for federal income tax purposes. The Code provides two alternative tests for determining whether the Death Benefit is a sufficient multiple of the Policy Value. We have designed your Policy to comply with these rules. We may take any action that may be necessary for the Policy to qualify as life insurance for tax purposes.
The definitional tests under the Code are based on the 1980 Commissioners Standard Ordinary (CSO) mortality tables. For Policies materially changed after 2008, the tests must be based on the 2001 CSO mortality tables. Because, in some circumstances, Policies issued based on the 1980 CSO mortality tables will not satisfy the definitional tests using the 2001 CSO mortality tables, you may not be permitted to make certain changes to your Policy (as defined by IRS Notices 2004-61 and 2006-95).
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As provided by Section 817(h) of the Code, the Secretary of the Treasury has set standards for diversification of the investments underlying variable life insurance policies. Failure to meet the diversification requirements would disqualify your Policy as life insurance for purposes of Section 7702 of the Code. We believe that your Policy complies with the provisions of Sections 7702 and 817(h) of the Code, but the application of these rules is not entirely clear. We may make changes to your Policy if necessary for the Policy to qualify as life insurance for tax purposes.
IRS Rev. Ruls. 2003-91 and 2003-92 provide guidance on when an Owners control of Separate Account assets will cause the Owner, and not the life insurance company, to be treated as the owner of those assets. Important indicators of investor control are the ability of the Owner to select the investment advisor, the investment strategy or the particular investments of the Separate Account. If the Owner of a Policy were treated as the owner of the mutual fund shares held in the Separate Account, the income and gains related to those shares would be included in the Owners gross income for federal income tax purposes. We believe that we own the assets of the Separate Account under current federal income tax law.
Tax Treatment of Life Insurance While your Policy is in force, increases due to investment experience are not subject to federal income tax until there is a distribution as defined by the Code. The Death Benefit received by a beneficiary will generally not be subject to federal income tax.
Unless the Policy is a MEC, as described below, a loan received under your Policy will not be treated as a distribution subject to current federal income tax. Interest paid by individual Owners of a Policy will ordinarily not be deductible. You should consult a qualified tax advisor as to the deductibility of interest paid, or accrued, by business Owners of a Policy. (See Business-Owned Life Insurance.)
So long as your Policy is not classified as a MEC (See Modified Endowment Contract), as a general rule, the proceeds from a surrender or withdrawal will be taxable only to the extent that the withdrawal exceeds the basis of the Policy. The basis of the Policy is generally equal to the premiums paid less any amounts previously received as tax-free distributions. Dividends, whether paid in cash, applied to the Policy, used to purchase additional insurance or to pay premiums, are taxed as withdrawals with a resulting reduction in basis. However, the reduction in the basis of the Policy is offset by a corresponding increase in basis when the dividend is applied to the Policy and not paid in cash. In certain circumstances, a withdrawal of Cash Value during the first 15 Policy Years may be taxable to the extent that the Cash Value exceeds the basis of the Policy. This means that the amount withdrawn may be taxable even if that amount is less than the basis of the Policy.
Caution must be used when taking cash out of a Policy through policy loans. If interest is not paid annually, it is added to the principal amount and the total amount will continue to accrue for as long as the loan is maintained on the Policy. If the Policy remains in force until the death of the Insured or, in the case of joint life insurance, the second death, the loan will be repaid from the tax-free Death Benefit. However, if the Policy terminates by any method other than death, the loan will be repaid from the Cash Value of the Policy, and the total Cash Value, including the total amount of the loan, will be taxable to the extent it exceeds the basis of the Policy. If the extended term insurance nonforfeiture option is available in your Policy, and it lapses to the extended term insurance, the loan will be repaid from Cash Value of the Policy and the loan repayment will be treated as income and taxable to the extent it exceeds the amount of premiums paid. In extreme situations, Owners can face what is called the surrender squeeze. The surrender squeeze occurs when the unborrowed value remaining in the Policy is insufficient to cover the interest payment required to keep the Policy in force or to cover the tax due if the Policy terminates. Either the interest would have to be paid annually or it would be added to the Policy loan, causing the Policy to terminate and any income tax due on the loan amount to be payable with other assets of the Owner.
Subject to the agreement of the Company, and the Owner meeting any conditions set by the Company, a Policy may be exchanged tax-free for another life insurance policy or an annuity contract covering the same Insured (or, in the case of joint life insurance, covering the Insureds or a surviving Insured). After 2009, the Code allows certain policies to be exchanged for long-term care policies on a tax-free basis. Policies that are exchanged for life insurance policies after 2008 may only be exchanged for life insurance policies using 2001 CSO mortality tables. Any cash received or loan repaid in an exchange will be taxed to the extent of the gain in the Policy (i.e., on gain-first basis). Special tax rules may apply when ownership of a Policy is transferred. You should seek qualified tax advice if you plan a transfer of ownership.
Modified Endowment Contracts (MEC) A Policy may be classified as a MEC if the cumulative premiums paid at any time during the first seven Policy Years exceed a defined seven-pay limit. The seven-pay limit is the sum of the premiums (net of expense and administrative charges) that would have to be paid in order for the Policy to be fully paid for after seven level annual payments based on defined interest and mortality assumptions. A Policy will be treated as a MEC unless any excess premiums are withdrawn from the Policy with interest within 60 days after the end of the Policy Year in which they are paid.
Whenever there is a material change under a Policy, it will generally be treated as a new contract for purposes of determining whether the Policy is a MEC, and it will be subjected to a new seven-pay period and a new seven-pay limit. The new seven-pay limit would be determined taking into account the value of the Policy at the time of such change. A materially changed Policy would be
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considered a MEC if it failed to satisfy the new seven-pay limit. A material change could occur as a result of certain changes to the benefits or terms of the Policy, such as a change in a death benefit option or a change in the Insured(s). A material change could occur as a result of an increase in the death benefit, the addition of a benefit or the payment of a premium that is considered unnecessary under the Code.
If the benefits under the Policy are reduced during the first seven Policy Years after entering into the Policy (or within seven years after a material change) or, in the case of joint life Policies, the lifetime of either Insured, for example, by requesting a decrease in the amount of insurance coverage, by making a withdrawal, by taking any other action resulting in a surrender of Cash Value to you according to the terms of your Policy, by electing the fixed-paid up option if available under your Policy or, in some cases, by lapsing the Policy, the seven-pay premium limit will be redetermined based on the reduced level of benefits and applied retroactively for purposes of the seven-pay test. If the premiums previously paid are greater than the recalculated seven-pay premium level limit, the Policy will become a MEC. A life insurance policy which is received in exchange for a MEC will also be considered a MEC.
If a Policy is a MEC, any distribution from the Policy will be taxed on a gain-first basis. Distributions for this purpose include a loan (including any increase in the loan amount to pay interest on an existing loan or an assignment or a pledge to secure a loan), a withdrawal of Cash Value or a surrender of the Policy. Distributions taken within the two-year period prior to the Policy becoming a MEC may also be taxed under the MEC tax rules. If a Policy terminates while there is a Policy loan, the cancellation of the loan and accrued loan interest also will be treated as a distribution to the extent not previously treated as such. Any such distributions will be considered taxable income to the extent the Cash Value exceeds the basis in the Policy. For MECs, the basis would be increased by the amount of any prior loan under the Policy that was considered taxable income. For purposes of determining the taxable portion of any distribution, all MECs issued by Northwestern Mutual to the same Owner (excluding certain qualified plans) during any calendar year are to be aggregated. The Secretary of the Treasury has authority to prescribe additional rules to prevent avoidance of gain-first taxation on distributions from MECs.
A 10% penalty tax will apply to the taxable portion of a distribution from a MEC. The penalty tax will not, however, apply to distributions (i) to taxpayers 59 1/2 years of age or older, (ii) in the case of a disability (as defined in the Code) or (iii) received as part of a series of substantially equal periodic annuity payments for the life (or life expectancy) of the taxpayer or the joint lives (or joint life expectancies) of the taxpayer and the taxpayers beneficiaries. The exceptions generally do not apply to life insurance policies owned by corporations or other entities.
Estate and Generation Skipping Taxes The amount of the Death Benefit will generally be includible in the Owners estate for federal estate tax purposes and any applicable state inheritance tax. If your Policy is a joint life Policy, the Life Insurance Benefit will be includible in the Owners estate if the second of the Insureds to die owns the Policy, and the fair market value of the Policy will be includible in the Owners estate if the Owner is not the last surviving Insured. An unlimited marital deduction permits deferral of federal estate and gift taxes until the death of the Owners surviving spouse.
If ownership of a Policy is transferred, either directly or in trust, to a person two or more generations younger than the Owner, the value of the Policy may be subject to a generation skipping transfer tax.
Section 2010 of the Code provides a $3.5 million estate tax exclusion for 2009. The exemption amount for gift tax purposes is $1 million for 2007 to 2010. The top estate, gift and generation skipping transfer tax rate is 45% in 2009. In 2010, the estate tax and generation skipping transfer tax are repealed and the gift tax rate is reduced to 35%. Unless these rules are extended or made permanent, they will be sunsetted or repealed in 2011 and the rules in effect in 2001 ($1 million exclusion amount and 50% maximum tax rate) will be reinstated. It is generally believed that the estate and generation skipping tax repeal will not be made permanent but that further changes may be made.
Business-Owned Life Insurance Business-owned life insurance may be subject to certain additional rules. Section 264(a)(1) of the Code generally disallows a deduction for premiums paid on Policies by anyone who is directly or indirectly a beneficiary under the Policy. Increases in Policy or Cash Value may also be subject to tax under the corporation alternative minimum tax provisions.
Section 264(a)(4) of the Code limits the Owners deduction for interest on loans taken against life insurance policies to interest on an aggregate total of $50,000 of loans per covered life only with respect to life insurance policies covering key persons. Generally, a key person means an officer or a 20% owner. However, the number of key persons will be limited to the greater of (a) five individuals, or (b) the lesser of 5% of the total officers and employees of the taxpayer or 20 individuals. Deductible interest for these Policies will be subject to limits based on current market rates.
In addition, Section 264(f) of the Code disallows a proportionate amount of a businesss interest deduction on non-life insurance indebtedness based on the amount of unborrowed Cash Value of non-exempt life insurance policies held in relation to other business assets. Exempt policies include policies held by natural persons unless the business is a direct or indirect beneficiary under the policy and policies owned by a business and insuring employees, directors, officers and 20% owners (as well as joint policies insuring 20% owners and their spouses).
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Section 101(j) of the Code provides that the Death Benefit payable under business-owned life insurance in which the business is also the beneficiary will be taxable unless (i) the Insured is an eligible employee and (ii) the employee is given notice of the insurance and the maximum face amount and consents to be insured and to the continuation of the insurance after the employee terminates service with the employer. Generally, an eligible employee is an officer, a director, a person who owns more than 5% of the business, an employee earning more than $100,000 annually (increased for cost of living after 2006) or an employee who is among the highest paid 35% of employees. The law also imposes an annual reporting and record-keeping obligation on the employer.
On September 11, 2007, the Treasury and IRS issued IRS Notice 2007-61 that established a safe harbor under which the annual increase in the cash value of life insurance policies owned by life insurance companies is not taxable provided the policies cover no more than 35% of the companys employees, directors, officers and 20% owners. The Notice adds that there is an unresolved issue whether cash value increases of other policies owned by life insurance companies may be taxable.
Policy Split Right If your Policy is a joint life Policy, your Policy permits the Owner to exchange the Policy for two policies, one on the life of each Insured, without evidence of insurability, if a change in the federal estate tax law results in either the repeal of the unlimited marital deduction or a 50% or greater reduction in the estate tax rate. The exchange must be made while both Insureds are alive (and neither Insured is classified as a Joint Insurable). The request for exchange must be received no later than 180 days after the earlier of the enactment of the law repealing the unlimited marital deduction or the enactment of the law reducing the estate tax rate by at least 50%.
The IRS has ruled with respect to one taxpayer that such a transaction would be treated as a non-taxable exchange. If not so treated, such a split of the Policy could result in the recognition of taxable income.
Split Dollar Arrangements Life insurance purchased under a split dollar arrangement is subject to special tax rules. IRS Notice 2002-8 provides that (1) the value of the current life insurance protection provided to the employee under the arrangement is taxed to the employee each year and, until the issuance of further guidance, can be determined using the governments Table 2001 rates or the insurers lower one year term rates (which, for arrangements entered into after January 28, 2002, must satisfy additional sales requirements); and (2) for split dollar arrangements entered into on or before September 17, 2003, taxation of the equity (cash surrender value in excess of the amount payable to the employer) is governed by prior law and is subject to the following three safe harbors: (a) the annual accrual of income will not, by itself, be enough to trigger a taxable transfer; (b) equity will not be taxed regardless of the level of the employers economic interest in the life insurance policy as long as the value of the life insurance protection is treated and reported as an economic benefit; and (c) the employee can elect loan treatment at any time, provided all premiums paid by the employer are treated as a loan entered into at the beginning of the first year in which payments are treated as loans.
The Treasury and IRS regulations regarding the taxation of split dollar arrangements apply only to arrangements entered into or materially changed after September 17, 2003. The regulations provide that such split dollar arrangements must be taxed under one of two mutually exclusive tax regimes depending on the ownership of the underlying life insurance policy. Collateral assignment split dollar arrangements, in which the employee owns the policy, must be taxed under a loan regime. Where such an arrangement imposes a below market interest rate or no interest rate, the employee is taxed on the imputed interest under Section 7872 of the Code. Endorsement split dollar arrangements, in which the employer owns the policy, must be taxed under an economic benefit regime. Under this regime, the employee is taxed each year on (i) the value of the current life insurance protection provided to the employee, (ii) the amount of policy Cash Value to which the employee has current access, and (iii) the value of any other economic benefits provided to the employee during the taxable year.
Under the Sarbanes-Oxley Act of 2002, it is a criminal offense for an employer with publicly traded stock to extend or arrange a personal loan to a director or executive officer after July 30, 2002. One issue that has not been clarified is whether each premium paid by such an employer under a split dollar arrangement with a director or executive officer is a personal loan subject to the new law.
Section 409A of the Code imposes requirements for nonqualified deferred compensation plans with regard to the timing of deferrals, distribution triggers, funding mechanisms and reporting requirements. Nonqualified deferred compensation plans that fail to meet these conditions are taxed currently on all compensation previously deferred and interest earned thereon and assessed an additional 20% penalty. The law does not limit the use of life insurance as an informal funding mechanism for nonqualified deferred compensation plans, but IRS Notice 2007-34 treats certain split dollar arrangements as nonqualified deferred compensation plans that must comply with the new rules. The effective date of these rules was December 31, 2008. Congress is also considering limiting an individuals annual aggregate deferrals to a nonqualified deferred compensation plan to $1,000,000.
Valuation of Life Insurance Special valuation rules apply to life insurance contracts distributed from a qualified plan to a participant or transferred by an employer to an employee. IRS Notice 2005-25 provides a safe harbor formula for valuing variable life insurance under which the value is the greater of the interpolated terminal reserve or the cash value (adjusted by a surrender factor for
23
policies distributed from qualified plans), both increased by a pro rata portion of the estimated dividends for the Policy Year. These rules do not apply to split dollar arrangements entered into on or before September 17, 2003 and not materially modified thereafter.
Other Tax Considerations Taxpayers are required by regulation to annually report all reportable transactions as defined in the regulations. Reportable transactions include transactions that are offered under conditions of confidentiality as to tax treatment and involve an advisor who receives a fee of $250,000 or more, or transactions that include a tax indemnity. Rev. Proc. 2003-25 further held that the purchase of life insurance policies by a business does not, by itself, constitute a reportable transaction.
Depending on the circumstances, the exchange of a Policy, a Policy loan (including the addition of unpaid loan interest to a Policy loan), or a change in ownership or an assignment of the Policy may have federal income tax consequences. In addition, federal, state and local transfer, estate, inheritance, and other tax consequences of Policy ownership, premium payments and receipt of Policy proceeds depend on the circumstances of each Owner or beneficiary. If you contemplate any such transaction you should consult a qualified tax adviser. In addition, a Death Benefit under the Policy may be subject to federal estate tax and state inheritance taxes.
We sell the Policy through our Financial Representatives who also are registered representatives of Northwestern Mutual Investment Services, LLC (NMIS). NMIS, our wholly-owned company, was organized under Wisconsin law in 1998 and is located at 611 East Wisconsin Avenue, Milwaukee, Wisconsin 53202. NMIS is a registered broker-dealer under the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority. NMIS is the principal underwriter and distributor of the Policy, and has entered into a Distribution Agreement with us.
Northwestern Mutual variable insurance and annuity products are available exclusively through NMIS and its registered representatives and cannot be held with or transferred to an unaffiliated broker-dealer. Except in limited circumstances, NMIS registered representatives are required to offer Northwestern Mutual variable insurance and annuity products. The amount and timing of sales compensation paid by insurance companies varies. The commissions, benefits, and other sales compensation that NMIS and its registered representatives receive for the sale of a Northwestern Mutual variable insurance or annuity product might be more or less than that received for the sale of a comparable product from another company.
The maximum commission payable to the registered representative who sold the Policy is 40% of Premium Payments up to the Target Premium and 2.75% of Premium Payments in excess of that amount during the first Policy Year; 6% of Premium Payments up to Target Premium and 2.75% of Premium Payments in excess of that amount paid in Policy Years 2-10; and 2.75% of Premium Payments thereafter. In addition, a commission of 0.10% of Policy Value less Policy Debt, is paid at the end of Policy Years 6 and later. We may pay new registered representatives differently during a training period. The entire amount of the sales commissions is passed through NMIS to the registered representative who sold the Policy and to his or her managers. The Company pays compensation and bonuses for the management team of NMIS, and other expenses of distributing the Policies.
Because registered representatives of NMIS are also our appointed agents, they may be eligible for various cash benefits, such as bonuses, insurance benefits, and non-cash compensation programs that we offer, such as conferences, achievement recognition, prizes, and awards. In addition, registered representatives of NMIS who meet certain productivity, persistency and length of service standards and/or their managers may be eligible for additional compensation. Sales of the Policies may help registered representatives and/or their managers qualify for such benefits. Certain registered representatives of NMIS may receive other payments from us for the recruitment, training, and supervision of financial representatives, production of promotional literature and similar services.
Commissions and other incentives and payments described above are not charged directly to Owners or to the Separate Account. We intend to recoup commissions and other sales expenses through fees and charges deducted under the Policy.
ATTAINED AGE
The Insureds Issue Age listed in the Policy, plus the number of complete Policy Years that have elapsed since the Policy Date.
24
CASH VALUE
The amount available in cash if the Policy is surrendered.
DATE OF ISSUE
The date on which insurance coverage takes effect as shown in the Policy.
DEATH BENEFIT
The gross amount payable to the beneficiary upon the death of second Insured, before the deduction of Policy Debt and other adjustments.
DIVISION
A subdivision of the Separate Account. We invest each Divisions assets exclusively in shares of one Portfolio.
FINANCIAL REPRESENTATIVE
An individual who is authorized to sell you the Policy and who is both licensed as a Northwestern Mutual insurance agent and registered as a representative of our affiliate, Northwestern Mutual Investment Services, LLC, the principal underwriter of the Policy.
FUND
Each Fund is registered under the 1940 Act as an open-end management investment company or as a unit investment trust, or is not required to be registered under the Act. Each is available as an investment option under the Policy. The assets of each of the Divisions of the Separate Account are used to purchase shares of the corresponding Portfolio of a Fund.
GENERAL ACCOUNT
All assets of the Company, other than those held in the Separate Account or in other separate accounts that have been or may be established by the Company.
HOME OFFICE
Our office at 720 East Wisconsin, Milwaukee, Wisconsin 53202-4797.
INSUREDS
The persons named as the Insureds on the application and in the Policy.
INVESTED ASSETS
The sum of all amounts in the Divisions of the Separate Account.
ISSUE AGE
An Insureds age on his or her birthday nearest the Policy Date.
MEC
Modified endowment contract as described in section 7702A of the Internal Revenue Code.
NET PREMIUM
The amount of Premium Payment remaining after Premium charges have been deducted.
OWNER (You, Your)
The person named in the Application as the Owner, or the person who becomes Owner of a Policy by transfer or succession.
POLICY ANNIVERSARY
The same day and month as the Policy Date in each year following the first Policy Year.
POLICY DATE
The date shown on the Policy from which the following are computed, among other things:
1. Policy Year;
2. Policy Anniversary;
3. the Issue Age of each Insured; and
4. the Attained Age of each Insured.
25
POLICY DEBT
The total amount of all outstanding Policy loans, including both principal and accrued interest.
POLICY VALUE
The cumulative amount invested, less withdrawals, adjusted for investment results and interest on Policy Debt, and reduced by the monthly charges for the cost of insurance and other expenses. It is also equal to the sum of Invested Assets and Policy Debt.
POLICY YEAR
A year that starts on the Policy Date or on a Policy Anniversary.
PORTFOLIO
A series of a Fund available for investment under the Policy which corresponds to a particular Division of the Separate Account.
PREMIUM PAYMENTS
All payments you make under the Policy other than loan repayments and transaction charges.
SEPARATE ACCOUNT
Northwestern Mutual Variable Life Account.
SPECIFIED AMOUNT
The amount you select, subject to minimums and underwriting requirements we establish, used in determining the insurance coverage on the Insureds lives.
TARGET PREMIUM
An amount based on the initial Specified Amount and characteristics of the Insured persons, such as Issue Age, sex and underwriting classification, used to compute the sales load, commissions, surrender charge and other expense charges during the first 10 Policy Years.
26
More information about the Separate Account is included in a Statement of Additional Information (SAI), which is dated the same day as this prospectus, is incorporated by reference in this prospectus, and is available free of charge from the Company. To request a free copy of the Separate Accounts SAI, or current annual report, call us toll-free at 1-888-455-2232. Under certain circumstances you or your financial representative may be able to obtain theses documents online at www.nmfn.com. Information about the Separate Account (including the SAI) can be reviewed and copied at the Public Reference Room of the SEC in Washington, DC. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-202-551-8090. Reports and other information about the Separate Account are available on the SECs Internet site at http://www.sec.gov, or they may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street, NE, Washington, DC 20549-0102.
Your Northwestern Mutual Financial Representative will provide you with illustrations for a Variable Joint Life Policy free of charge upon your request. The illustrations show how the Death Benefit, Policy Value and cash surrender value for a Policy would vary based on hypothetical investment results. Your Northwestern Mutual Financial Representative will also respond to other inquiries you may have regarding the Policy, or you may contact Advanced Business Services Center at 1-866-464-3800.
Investment Company Act File No. 811-03989
27
Monthly Policy ChargeMortality and Expense Risk ChargeSpecified Amount Component
Table of Annual Charges Per $1,000 of Initial Specified Amount
Issue Age* |
Annual Charge |
Issue Age* | Annual Charge |
Issue Age* | Annual Charge | ||||||||||||
20-25 | $ | 0.04 | 42 | $ | 0.33 | 59 | $ | 0.94 | |||||||||
26 | 0.05 | 43 | 0.36 | 60 | 0.99 | ||||||||||||
27 | 0.06 | 44 | 0.38 | 61 | 1.04 | ||||||||||||
28 | 0.07 | 45 | 0.41 | 62 | 1.10 | ||||||||||||
29 | 0.08 | 46 | 0.44 | 63 | 1.15 | ||||||||||||
30 | 0.09 | 47 | 0.47 | 64 | 1.21 | ||||||||||||
31 | 0.10 | 48 | 0.50 | 65 | 1.26 | ||||||||||||
32 | 0.11 | 49 | 0.53 | 66 | 1.31 | ||||||||||||
33 | 0.12 | 50 | 0.57 | 67 | 1.35 | ||||||||||||
34 | 0.13 | 51 | 0.60 | 68 | 1.40 | ||||||||||||
35 | 0.14 | 52 | 0.63 | 69 | 1.44 | ||||||||||||
36 | 0.17 | 53 | 0.66 | 70 | 1.49 | ||||||||||||
37 | 0.19 | 54 | 0.69 | 71 | 1.54 | ||||||||||||
38 | 0.22 | 55 | 0.72 | 72 | 1.58 | ||||||||||||
39 | 0.25 | 56 | 0.77 | 73 | 1.63 | ||||||||||||
40 | 0.28 | 57 | 0.83 | 74 | 1.67 | ||||||||||||
41 | 0.30 | 58 | 0.88 | 75-85 | 1.72 |
* | The Issue Age used in this calculation equals the younger Insured Issue Age plus an age adjustment. The age adjustment is based on the age difference (older Issue Age minus younger Issue Age) and this schedule: |
Age Difference (years) |
Age Adjustment (years) |
|||||||
0-1 | 0 | |||||||
2-4 | 1 | |||||||
5-8 | 2 | |||||||
9-14 | 3 | |||||||
15-24 | 4 | |||||||
25-34 | 5 | |||||||
35-44 | 6 | |||||||
45-54 | 7 | |||||||
55-65 | 8 |
Example: For a Policy at Issue Ages 65 and 60 and a Specified Amount of $1,000,000, the age adjustment is 2 and the Issue Age is 62. The annual charge per $1,000 of Specified Amount is $1.10. The Monthly Policy ChargeMortality and Expense Risk ChargeSpecified Amount component will be $1,100.04 annually, or $91.67 monthly, for this Policy.
Note: In no event will the sum of the Monthly Policy ChargeMortality and Expense Risk ChargeSpecified Amount component annual charge and the Monthly Policy ChargeUnderwriting and Issue Charge annual charge exceed $1.90 per $1,000 of initial Specified Amount. The Monthly Policy ChargeUnderwriting and Issue Charge will be reduced to meet this constraint if necessary.
28
STATEMENT OF ADDITIONAL INFORMATION
May 1, 2009
VARIABLE JOINT LIFE
A Flexible Premium Variable Joint Life Policy with Insurance Payable on Second Death (the Policy).
Issued by The Northwestern Mutual Life Insurance Company
and
Northwestern Mutual Variable Life Account
We no longer issue the Policy described in this Statement of Additional Information. The Policies we currently offer are described in separate Prospectuses and Statements of Additional Information.
This Statement of Additional Information (SAI) is not a prospectus, but supplements and should be read in conjunction with the prospectus for the Policy identified above and dated the same date as this SAI. The prospectus may be obtained by writing The Northwestern Mutual Life Insurance Company, 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202, calling telephone number 1-888-455-2232, or visiting the website www.nmfn.com.
B-1
TABLE OF CONTENTS
Page | ||
DISTRIBUTION OF THE POLICY |
B-3 | |
EXPERTS |
B-3 | |
FINANCIAL STATEMENTS OF THE ACCOUNT |
B-3 | |
FINANCIAL STATEMENTS OF NORTHWESTERN MUTUAL |
F-1 |
B-2
DISTRIBUTION OF THE POLICY
The Policy is offered on a continuous basis exclusively through individuals who, in addition to being life insurance agents of Northwestern Mutual, are registered representatives of Northwestern Mutual Investment Services, LLC (NMIS). NMIS is our wholly-owned company. The principal business address of NMIS is 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
NMIS is the principal underwriter of the Policies for purposes of the federal securities laws. We paid the following amounts to NMIS with respect to sales of variable life insurance policies issued in connection with the Account during each of the last three fiscal years representing commission payments NMIS made to our agents and related benefits. None of these amounts was retained by NMIS and no amounts were paid to other underwriters or broker-dealers. We also paid additional amounts to NMIS in reimbursement for other expenses related to the distribution of variable life insurance policies.
Year |
Amount | ||
2008 |
$ | 43,654,229 | |
2007 |
$ | 56,984,188 | |
2006 |
$ | 61,533,181 |
NMIS also provides certain services related to the administration of payment plans under the Policy pursuant to an administrative services contract with Northwestern Mutual. In exchange for these services, NMIS receives compensation to cover the actual costs incurred by NMIS in performing these services.
EXPERTS
The financial statements of the Account, and the related notes and report of , an independent registered public accounting firm, contained in the Annual Report to Policy Owners for the fiscal year ended December 31, 2008, that are incorporated by reference in this Statement of Additional Information, and the financial statements of Northwestern Mutual, and the related notes and report of , for the fiscal year ended on the same date that have been included in this Statement of Additional Information are so included in reliance on the reports of , an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP provides audit services for the Account. The address of is .
FINANCIAL STATEMENTS OF THE ACCOUNT
FINANCIAL STATEMENTS WILL BE ADDED BY AMENDMENT
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Page F-1 through F- are reserved for the December 31, 2008 Consolidated Financial Statements of The Northwestern Mutual Life Insurance Company.
F-1
PART C
OTHER INFORMATION
Item 26. Exhibits
Exhibit |
Description | Filed Herewith/Incorporated Herein By Reference To | ||
(a)(1) |
Resolution of the Board of Trustees of The Northwestern Mutual Life Insurance Company amending Northwestern Mutual Variable Life Account Operating Authority
|
Exhibit (a)(1) to Form N-6 Post-Effective Amendment No. 30 for Northwestern Mutual Variable Life Account, File No. 2-89972, filed February 21, 2006 | ||
(a)(2) |
Resolution of Board of Trustees of The Northwestern Mutual Life Insurance Company establishing the Account | Exhibit A(1) to Form S-6 Registration Statement for Northwestern Mutual Variable Life Account, File No. 333-36865, filed on October 1, 1997
| ||
(b) |
Not Applicable
|
|||
(c) |
Distribution Agreement Between The Northwestern Life Insurance Company and Northwestern Mutual Investment Services, LLC, dated May 1, 2006 | Exhibit (c) to Form N-6 Registration Statement for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed on July 28, 2006
| ||
(d)(1) |
Flexible Premium Variable Joint Life Insurance Policy (RP.VJL. 1298), with Policy Split Provision, including Policy amendment | Exhibits A(5)(a) and A(5)(b) to Form S-6 Post-Effective Amendment No. 4 for Northwestern Mutual Variable Life Account, File No. 333-59103, filed May 31, 2001
| ||
(d)(2) |
Variable Life Insurance Policy, RR.VJL, Flexible Premium Variable Joint Life policy, including Policy Split Provision (sex-neutral) | Exhibit A(5)(a) to Form S-6 Registration Statement for Northwestern Mutual Variable Life Account, File No. 333-59103, filed July 15, 1998
| ||
(d)(3) |
Variable Life Insurance Policy, RR.VJL, Flexible Premium Variable Joint Life policy, including Policy Split Provision (sex-distinct) | Exhibit A(5)(b) to Form S-6 Registration Statement for Northwestern Mutual Variable Life Account, File No. 333-59103, filed July 15, 1998
| ||
(e) |
Form of Life Insurance Application 90-1 JCL (0198) WISCONSIN and Application Supplement (1003) | Exhibit (e) to Form N-6 Post-Effective Amendment No. 9 for Northwestern Mutual Variable Life Account, File No. 333-59103, filed April 28, 2005
| ||
(f)(1) |
Restated Articles of Incorporation of The Northwestern Mutual Life Insurance Company (adopted July 26, 1972) | Exhibit A(6)(a) to Form S-6 Post-Effective Amendment No. 18 for Northwestern Mutual Variable Life Account, File No. 2-89972, filed April 26, 1996
| ||
(f)(2) |
Amended By-Laws of The Northwestern Mutual Life Insurance Company dated December 4, 2002 | Exhibit (f) to Form N-6 Post-Effective Amendment No. 6 for Northwestern Mutual Variable Life Account, File No. 333-59103, filed February 28, 2003
| ||
(g) |
Form of Reinsurance Agreement | Exhibit (g) to Form N-6 Post-Effective Amendment No. 6 for Northwestern Mutual Variable Life Account, File No. 333-59103, filed February 28, 2003
| ||
(h)(a)(1) |
Participation Agreement dated March 16, 1999 Among Russell Insurance Funds, Russell Fund Distributors, Inc. and The Northwestern Mutual Life | Exhibit (b)(8)(a) to Form N-4 Post-Effective Amendment No. 66 for NML Variable Annuity Account B, File No. 2-29240, filed on April 28, 2005
|
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Insurance Company | ||||
(h)(a)(2) |
Amendment No. 1 dated August 7, 2000 to the Participation Agreement dated March 16, 1999 Among Russell Insurance Funds, Russell Fund Distributors, Inc. and The Northwestern Mutual Life Insurance Company
|
Exhibit (h)1(a)(2) to Form N-6 Registration Statement for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed on July 28, 2006 | ||
(h)(a)(3) |
Amendment No. 2 dated October 13, 2006 to Participation Agreements dated March 16, 1999 and August 7, 2000, respectively, by and among The Northwestern Mutual Life Insurance Company, Russell Investment Funds, f/k/a Russell Insurance Funds, and Russell Fund Distributors, Inc.
|
Exhibit (h)1(a)(3) to Form N-6 Pre-Effective Amendment No. 1, for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed December 13, 2006 | ||
(h)(b)(1) |
Participation Agreement dated May 1, 2003 among Variable Insurance Products Funds, Fidelity Distributors Corporation and The Northwestern Mutual Life Insurance Company
|
Exhibit (b)(8)(b) to Form N-4 Post-Effective Amendment No. 66 for NML Variable Annuity Account B, File No. 2-29240, filed on April 28, 2005 | ||
(h)(b)(2) |
Amendment No. 1 dated October 18, 2006 to Participation Agreement dated May 1, 2003, by and among The Northwestern Mutual Life Insurance Company, Fidelity Distributors Corporation, and each of Variable Insurance Products Fund, Variable Insurance Products Fund II, and Variable Insurance Products Fund III
|
Exhibit (h)1(b)(2) to Form N-6 Pre-Effective Amendment No. 1, for Northwestern Mutual Variable Life Account II, File No. 333-136124, filed December 13, 2006 | ||
(h)(c)(1) |
Administrative Service Fee Agreement dated February 28, 1999 between The Northwestern Mutual Life Insurance Company and Frank Russell Company
|
Exhibit (b)(8)(c) to Form N-4 Post-Effective Amendment No. 66 for NML Variable Annuity Account B, File No. 2-29240, filed on April 28, 2005 | ||
(h)(c)(2) |
Form of Administrative Services Agreement | Exhibit (b)(8)(f) to Form N-4 Post-Effective Amendment No. 17 for NML Variable Annuity Account A, File No. 333-72913, filed on April 20, 2007
| ||
(h)(d)(1) |
Service Agreement dated May 1, 2003 between Fidelity Investments Institutional Operations Company, Inc. and The Northwestern Mutual Life Insurance Company
|
Exhibit (b)(8)(c)(2) to Form N-4 Pre-Effective Amendment No. 1 for NML Variable Annuity Account A, File No. 333-133380, filed on August 8, 2006 | ||
(h)(d)(2) |
Amendment dated August 1, 2004 to the Service Agreement dated May 1, 2003 between Fidelity Investments Institutional Operations Company, Inc. and The Northwestern Mutual Life Insurance Company
|
Exhibit (b)(8)(c)(3) to Form N-4 Pre-Effective Amendment No. 1 for NML Variable Annuity Account A, File No. 333-133380, filed on August 8, 2006 | ||
(i) |
Not Applicable
|
|||
(j)(a) |
Agreement entered into on February 13, 1984 among Northwestern Mutual Variable Life Account, The Northwestern Mutual Life Insurance
|
Exhibit A(8) to Form S-6 Registration Statement for Northwestern Mutual Variable Life Account, File No. 333-36865, filed October 1, 1997 |
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Company and NML Equity Services, Inc. (n/k/a Northwestern Mutual Investment Services, LLC) | ||||
(j)(b) |
Form of Shareholder Information Agreement | Exhibit (b)(8)(g) to Form N-4 Post-Effective Amendment No. 17 for NML Variable Annuity Account A, File No. 333-72913, filed on April 20, 2007
| ||
(j)(c) |
Power of Attorney
|
Filed herewith. | ||
(j)(d) |
NMIS/NM Annuity Operations Admin Agreement | Exhibit (b)(8)(i) to Form N-4 Post-Effective Amendment No. 19 for NML Variable Annuity Account A, File No. 333-72913, filed on April 22, 2008
| ||
(k) |
Opinion and Consent of Raymond J. Manista, Esq. dated February 19, 2009
|
Filed herewith. | ||
(l) |
Not Applicable
|
|||
(m) |
Not Applicable
|
|||
(n) |
Consent of dated April , 2009
|
To be filed by amendment. | ||
(o) |
Not Applicable
|
|||
(p) |
Not Applicable
|
|||
(q) |
Memorandum describing Issuance, Transfer and Redemption Procedures for Variable Life Insurance Contracts Pursuant to Rule 6e-3(T)(b)(12)(iii) and Method of Computing the Adjustment in Payments and Cash Values for Conversions Pursuant to Rule 6e-3(T)(b)(13)(v)(B)
|
Exhibit (q) to Form N-6 Post-Effective Amendment No. 12 for Northwestern Mutual Variable Life Account, File No. 333-59103, filed April 27, 2006 |
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Item 27. Directors and Officers of the Depositor
The following lists include all of the Trustees, executive officers and other officers of The Northwestern Mutual Life Insurance Company without regard to their activities relating to variable life insurance policies or their authority to act or their status as "officers" as that term is used for certain purposes of the federal securities laws and rules thereunder.
TRUSTEES As of February 1, 2009
Name |
Business Address | |
Facundo L. Bacardi |
Apache Capital 2665 South Bayshore Drive Suite 601 Coconut Grove, FL 33133 | |
| ||
Robert C. Buchanan |
Fox Valley Corporation P.O. Box 727 Appleton, WI (54912-0727) | |
George A. Dickerman |
Spalding Sports Worldwide 68 Normandy Road Longmeadow, MA 01106-1259 | |
David J. Drury |
Poblocki Sign Company LLC 922 South 70th Street Milwaukee, WI 53214 | |
Connie K. Duckworth |
ARZU 77 Stone Gate Lane Lake Forest, IL 60045 | |
David A. Erne |
Reinhart Boener Van Deuren, SC 1000 North Water Street Suite 2100 Milwaukee, WI 53202 | |
James P. Hackett |
Steelcase, Inc. 901 44th Street Grand Rapids, MI 49508 | |
Hans Helmerich |
Helmerich & Payne, Inc. 1437 South Boulder Tulsa, OK 74119 | |
Dale E. Jones |
Leadership Development Revolution LLC 1717 Rhode Island Avenue, NW 7th Floor Washington, DC 20036 | |
Stephen F. Keller |
101 South Las Palmas Avenue Los Angeles, CA 90004 | |
Margery Kraus |
APCO Worldwide 700 12th Street, NW, Suite 800 Washington, DC 20005 |
C-4
David J. Lubar |
Lubar & Co. 700 N. Water Street Suite 1200 Milwaukee, WI 53202 | |
Ulice Payne, Jr. |
Addison-Clifton, L.L.C. 13555 Bishops Court Suite 245 Brookfield, WI 53005 | |
H. Mason Sizemore, Jr. |
2054 N.W. Blue Ridge Drive Seattle, WA 98177 | |
Peter M. Sommerhauser |
Godfrey & Kahn, S.C. 780 North Water Street Milwaukee, WI 53202-3590 | |
John E. Steuri |
52 River Ridge Road Little Rock, AR 72227-1518 | |
John J. Stollenwerk |
Allen-Edmonds Shoe Corporation 201 East Seven Hills Road P.O. Box 998 Port Washington, WI 53074-0998 | |
S. Scott Voynich |
Robinson, Grimes & Company, PC 5637 Whitesville Road Columbus, GA 31904 | |
Barry L. Williams |
Williams Pacific Ventures, Inc. 4 Embarcadero Center, Suite 3700 San Francisco, CA 94111 | |
Kathryn D. Wriston |
115 E. 69th Street, 4th Floor New York, NY 10021 | |
Edward J. Zore |
The Northwestern Mutual Life Insurance Company 720 East Wisconsin Avenue Milwaukee, WI 53202 |
EXECUTIVE OFFICERS As of February 1, 2009
Name |
Title | |
Edward J. Zore |
President and Chief Executive Officer | |
Gregory C. Oberland |
Executive Vice President (Insurance and Technology) | |
Gary A. Poliner |
Executive Vice President (Investment Products and Services) | |
Marcia Rimai |
Executive Vice President (Chief Administration Officer) | |
John E. Schlifske |
Executive Vice President (Affiliate Investment) | |
David D. Clark |
Senior Vice President (Real Estate) | |
Mark G. Doll |
Senior Vice President and Chief Investment Officer |
C-5
Christina H. Fiasca |
Senior Vice President (Agency Services) | |
William C. Koenig |
Senior Vice President (Government Relations Actuary) | |
Jeffrey J. Lueken |
Senior Vice President (Securities) | |
Jean M. Maier |
Senior Vice President (Enterprise Operations) and Chief Compliance Officer | |
Meridee J. Maynard |
Senior Vice President (Product Distribution) | |
Todd M. Schoon |
Senior Vice President (Agencies) | |
Michael G. Carter |
Vice President and Chief Financial Officer | |
Eric P. Christophersen |
Vice President (Compliance/Best Practices) | |
Gloster B. Current |
Vice President (Corporate Affairs) and Assistant to the President | |
Jefferson V. DeAngelis |
Vice President (Public Markets) | |
Timothy J. Gerend |
Vice President (Field Compensation and Planning) | |
Kimberley Goode |
Vice President (Communications) | |
Karl G. Gouverneur |
Vice President (Information Systems) | |
John M. Grogan |
Vice President (Wealth Management) | |
Thomas G. Guay |
Vice President (New Business) | |
Gary M. Hewitt |
Vice President & Treasurer (Treasury & Investment Operations) | |
J. Chris Kelly |
Vice President and Controller | |
John L. Kordsmeier |
Vice President (Enterprise Solutions) | |
Susan A. Lueger |
Vice President (Human Resources) | |
Kathleen A. Oman |
Vice President (Policyowner Services) | |
David R. Remstad |
Vice President & Chief Actuary | |
Bethany Rodenhuis |
Vice President (Corporate Planning) | |
Calvin R. Schmidt |
Vice President (Investment Product Operations) | |
David W. Simbro |
Vice President (Disability Income) | |
Paul J. Steffen |
Vice President (Agencies) | |
Donald G. Tyler |
Vice President (IPS Products and Sales) | |
Martha M. Valerio |
Vice President (Information Systems) | |
Conrad C. York |
Vice President (Marketing) | |
Michael L. Youngman |
Vice President (Government Relations) | |
Timothy G. Schaefer |
Chief Information Officer | |
Raymond J. Manista |
General Counsel and Secretary |
OTHER OFFICERS As of February 1, 2009
Donald C. Kiefer |
VP Actuary | |
Kenneth M. Latus |
Actuary | |
James Lodermeier |
Senior Actuary | |
Robert G. Meilander |
VP Corporate Actuary | |
Ted A. Matchulat |
Director Product Compliance | |
Jon K. Magalska |
Senior Actuary | |
Arthur V. Panighetti |
VP Actuary | |
P. Andrew Ware |
VP Actuary | |
|
||
Mark S. Bishop |
Regional VP Field Supv | |
Jennifer L. Brase |
Regional VP Field Supv | |
Somayajulu Durvasula |
VP Agency Dev | |
Michael S. Ertz |
VP Field Administration | |
Mark J. Gmach |
Regional VP Field Supv | |
Werner Loots |
Regional VP Field Supv | |
Steven C. Mannebach |
VP Agency Dev | |
Daniel J. OMeara |
Regional VP Field Supv | |
Charles J. Pendley |
VP Agency Dev | |
|
||
Sandra L. Botcher |
VP Audit | |
|
||
Robert J. Johnson |
Director Compliance Oversight and Review |
C-6
James M. Makowski |
Asst. Director Marketing Materials Compliance | |
Timothy Nelson |
Director Market Conduct | |
|
||
Jason T. Anderson |
Assistant Director Tax | |
Gwen C. Canady |
Director Corporate Reporting | |
Barbara E. Courtney |
Director Mutual Fund Accounting | |
Walter M. Givler |
VP Accounting Policy | |
David K. Nunley |
VP-Tax | |
Stephen R. Stone |
Director Investment Accounting | |
|
||
John M. Abbott |
Director-Field Investigations | |
Carl E. Amick |
VP-Risk Management Operations | |
Maryann Bialo |
Asst. Director DI Benefits | |
Pamela C. Bzdawka |
Assistant Director-SIU | |
Janice L. Chase |
Asst. Director-Large Case | |
Stephen J. Frankl |
Director-Sales Strategy and Support | |
Sharon A. Hyde |
Asst. Director DI Benefits | |
Cynthia Lubbert |
Asst. Director-DI Underwriting | |
Steven J. Stribling |
Director DI Benefits | |
Cheryl L. Svehlek |
Director-Administration | |
|
||
Laila V. Hick |
Director of Field Supervision | |
Karla D. Hill |
Asst. Director of Distribution Operations | |
Joanne M. Migliaccio |
Director of Distribution Operations | |
Daniel A. Riedl |
VP Distribution Policies and Operations | |
|
||
Christen L. Partleton |
VP Facility Operations | |
|
||
Robyn S. Cornelius |
Director Dist Planning | |
David J. Dorshorst |
Director of Field Comp | |
Allen M. Kluz |
Director of Field Benefits | |
Troy W. McMahan |
Director of FCP Systems | |
Jay J. Miller |
VP Advanced Planning | |
Richard P. Snyder |
Director Distribution Planning | |
William H. Taylor |
Director of Financial Security Planning | |
|
||
Pency P. Byhardt |
VP-Field Development | |
Sharen L. King |
Director-Field Development Systems | |
|
||
Douglas P. Bates |
VP Federal Relations | |
Steven M. Radke |
VP Leg & Reg Relations | |
|
||
Blaise C. Beaulier |
VP Information Systems | |
Robert J. Kowalsky |
VP Information Systems | |
|
||
David A. Eurich |
Director IPS Training, Marketing & Communications | |
Martha M. Kendler |
Director IPS Annuity Products | |
Arleen J. Llewellyn |
Director Business Integration | |
Mac McAuliffe |
National Sales Director IPS - Sales | |
Michael J. Mihm |
Director IPS Business Development | |
Ronald C. Nelson |
Director IPS Research & Product Support | |
Jeffrey J. Niehaus |
Director IPS Business Retirement Markets | |
David G. Stoeffel |
VP IPS Investment Product Lines | |
Kellen A. Thiel |
Director IPS Advisory Products | |
Brian D. Wilson |
Director IPS Marketing & Sales | |
Robert J. Wright |
Director IPS Strategic Partnerships Product Support | |
C-7
Meg E. Jansky |
Director-Annuity Operations | |
Lisa A. Myklebust |
Director-Business Systems Team | |
|
||
Mark J. Backe |
Asst. General Counsel & Asst. Secretary | |
Beth M. Berger |
Asst. General Counsel & Asst. Secretary | |
Frederick W. Bessette |
Asst. General Counsel & Asst. Secretary | |
Melissa J. Bleidorn |
Asst. General Counsel & Asst. Secretary | |
Anne T. Brower |
Asst. General Counsel & Asst. Secretary | |
Michael S. Bula |
Asst. General Counsel & Asst. Secretary | |
M. Christine Cowles |
Asst. General Counsel & Asst. Secretary | |
Domingo G. Cruz |
Asst. General Counsel & Asst. Secretary | |
Mark S. Diestelmeier |
Asst. General Counsel & Asst. Secretary | |
John E. Dunn |
VP & Investment Products & Services Counsel | |
James R. Eben |
Asst. General Counsel & Asst. Secretary | |
Marcia E. Facey |
Asst. General Counsel & Asst. Secretary | |
Chad E. Fickett |
Asst. General Counsel & Asst. Secretary | |
Gerald E. Fradin |
Asst. General Counsel & Asst. Secretary | |
James C. Frasher |
Asst. General Counsel & Asst. Secretary | |
Matthew E. Gabrys |
Asst. General Counsel & Asst. Secretary | |
John K. Garofani |
Asst. General Counsel & Asst. Secretary | |
Sheila M. Gavin |
Asst. General Counsel & Asst. Secretary | |
Kevin M. Gleason |
Asst. General Counsel & Asst. Secretary | |
C. Claibourne Greene |
Asst. General Counsel & Asst. Secretary | |
Elizabeth S. Idleman |
Asst. General Counsel & Asst. Secretary | |
James A. Koelbl |
Asst. General Counsel & Asst. Secretary | |
Abimbola O. Kolawole |
Asst. General Counsel & Asst. Secretary | |
Carol L. Kracht |
VP, Deputy General Counsel & Investment Counsel | |
Elizabeth J. Lentini |
Asst. General Counsel & Asst. Secretary | |
George R. Loxton |
Asst. General Counsel & Asst. Secretary | |
Stephanie Lyons |
Asst. General Counsel & Asst. Secretary | |
Dean E. Mabie |
Asst. General Counsel & Asst. Secretary | |
Steve Martinie |
Asst. General Counsel & Asst. Secretary | |
Michael J. Mazza |
Asst. General Counsel & Asst. Secretary | |
James L. McFarland |
Asst. General Counsel & Asst. Secretary | |
Lesli H. McLinden |
Asst. General Counsel & Asst. Secretary | |
Larry S. Meihsner |
Asst. General Counsel & Asst. Secretary | |
Christopher J. Menting |
Asst. General Counsel & Asst. Secretary | |
Richard E. Meyers |
Asst. General Counsel & Asst. Secretary | |
Scott J. Morris |
Asst. General Counsel & Asst. Secretary | |
Jennifer W. Murphy |
Asst. General Counsel & Asst. Secretary | |
David K. Nelson |
Asst. General Counsel & Asst. Secretary | |
Mary S. Nelson |
Asst. General Counsel & Asst. Secretary | |
Michelle Nelson |
Asst. General Counsel & Asst. Secretary | |
Timothy A. Otto |
Asst. General Counsel & Asst. Secretary | |
Randy M. Pavlick |
Asst. General Counsel & Asst. Secretary | |
David W. Perez |
Asst. General Counsel & Asst. Secretary | |
Judith L. Perkins |
Asst. General Counsel & Asst. Secretary | |
William C. Pickering |
Asst. General Counsel & Asst. Secretary | |
Nora M. Platt |
Asst. General Counsel & Asst. Secretary | |
Harvey W. Pogoriler |
Asst. General Counsel & Asst. Secretary | |
Zhibin Ren |
Asst. General Counsel & Asst. Secretary | |
Peter K. Richardson |
Asst. General Counsel & Asst. Secretary | |
Tammy M. Roou |
VP & Ins & Distr Counsel | |
Thomas F. Scheer |
Asst. General Counsel & Asst. Secretary | |
Kathleen H. Schluter |
VP & Tax Counsel | |
Rodd Schneider |
VP & Litigation Counsel | |
Sarah E. Schott |
Asst. General Counsel & Asst. Secretary |
C-8
Catherine L. Shaw |
Asst. General Counsel & Asst. Secretary | |
David Silber |
Asst. General Counsel & Asst. Secretary | |
Mark W. Smith |
Assoc. General Counsel & Asst. Secretary | |
Karen J. Stevens |
Asst. General Counsel & Asst. Secretary | |
Brenda J. Stugelmeyer |
Asst. General Counsel & Asst. Secretary | |
Rachel L. Taknint |
VP, Dept. Planning & Ops & Assoc. General Counsel | |
John M. Thompson |
Asst. General Counsel & Asst. Secretary | |
Douglas D. Timmer |
Asst. General Counsel & Asst. Secretary | |
Andrew T. Vedder |
Asst. General Counsel & Asst. Secretary | |
Warren, John W. |
Asst. General Counsel & Asst. Secretary | |
Catherine A. Wilbert |
Asst. General Counsel & Asst. Secretary | |
Catherine M. Young |
Asst. General Counsel & Asst. Secretary | |
Terry R. Young |
Asst. General Counsel & Asst. Secretary | |
|
||
Jason R. Handal |
Director-Speciality Markets | |
Todd L. Laszewski |
Director Life Product Development | |
Jeffrey S. Marks |
Director Special Projects | |
Jane Ann Schiltz |
VP Business Markets | |
|
||
Gregory A. Gurlik |
Director Long Term Care Product Development | |
Terese J. Capizzi |
Director Long Term Care Administration | |
John K. Wilson |
Director Long Term Care Sales Support | |
Mollie A. Kenny |
Regulatory Consultant | |
|
||
Carrie L. Bleck |
Director Policyowner Services | |
Sherri L. Schickert |
Director Policyowner Services | |
Sandra K. Scott-Tyus |
Director Policyowner Services | |
Diane P. Smith |
Asst. Director Policyowner Services | |
Natalie J. Versnik |
Director Policyowner Services | |
|
||
Donna L. Lemanczyk |
Asst. Secretary | |
Warren L. Smith |
Asst. Secretary | |
|
||
Karla J. Adams |
Director Investment Risk Management | |
James A. Brewer |
Director Investment Planning | |
Donald Forecki |
Director Investment Operations, Asst. Secretary | |
Karen A. Molloy |
Director Banking & Cash Management, Asst. Treasurer | |
Patricia A. Zimmermann |
Director Investment Technology & Development, Asst. Secretary | |
|
||
Shanklin B. Cannon |
Medical Director | |
Kurt P. Carbon |
Director Life Lay Standards | |
Wayne F. Heidenreich |
Medical Director | |
Paul W. Skalecki |
VP Underwriting Standards |
The business addresses for all of the executive officers and other officers is 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
Item 28. Persons Controlled By or Under Common Control with the Depositor or Registrant
The subsidiaries of The Northwestern Mutual Life Insurance Company ("Northwestern Mutual"), as of February 1, 2009 are set forth on pages C-11 through C-12. In addition to the subsidiaries set forth on pages C-11 through C-12, the following separate investment accounts (which include the Registrant) may be deemed to be either controlled by, or under common control with, Northwestern Mutual:
1. | NML Variable Annuity Account A |
2. | NML Variable Annuity Account B |
C-9
3. | NML Variable Annuity Account C |
4. | Northwestern Mutual Variable Life Account |
5. | Northwestern Mutual Variable Life Account II |
Northwestern Mutual Series Fund, Inc. and Russell Investment Funds (the "Funds"), shown below as subsidiaries of Northwestern Mutual, are investment companies, registered under the Investment Company Act of 1940, offering their shares to the separate accounts identified above; and the shares of the Funds held in connection with certain of the accounts are voted by Northwestern Mutual in accordance with voting instructions obtained from the persons who own, or are receiving payments under, variable annuity contracts or variable life insurance policies issued in connection with the separate accounts, or in the same proportions as the shares which are so voted.
C-10
NORTHWESTERN MUTUAL CORPORATE STRUCTURE1
(as of February 1, 2009)
Name of Subsidiary |
Jurisdiction of Incorporation | |||
Amber, LLC 100% ownership |
Delaware | |||
Baraboo, Inc. 100% ownership |
Delaware | |||
Bayridge, LLC 100% ownership |
Delaware | |||
Bradford, Inc. 100% ownership |
Delaware | |||
Brendan International Sales, Inc. 100% ownership |
U.S. Virgin Islands | |||
Burgundy, LLC 100% ownership |
Delaware | |||
Carlisle Ventures, Inc. 100% ownership |
Delaware | |||
Chateau, Inc. 100% ownership of Common & Class B Preferred Stock |
Delaware | |||
Chateau, LLC 100% ownership |
Delaware | |||
Chateau I, LP 100% ownership |
Delaware | |||
Coral, Inc. 100% ownership |
Delaware | |||
Cortona Holdings, LLC |
Delaware | |||
Foxkirk, LLC 100% ownership |
Delaware | |||
Frank Russell Company 92.75% ownership |
Washington | |||
Frank Russell Investment Management Company 92.75% ownership |
Washington | |||
Hazel, Inc. 100% ownership |
Delaware | |||
Health Invest, LLC 100% ownership |
Delaware | |||
Higgins, Inc. 100% ownership |
Delaware | |||
Highbrook International Sales, Inc. 100% ownership |
U.S. Virgin Islands | |||
Hobby, Inc. 100% ownership |
Delaware | |||
Hollenberg, LLC 100% ownership |
Delaware | |||
Jerusalem Avenue Property, LLC 100% ownership |
Delaware | |||
Justin International FSC, Inc. 100% ownership |
U.S. Virgin Islands | |||
JYD Assets, LLC 100% ownership |
Delaware | |||
Klode, Inc. 100% ownership |
Delaware | |||
Kristiana International Sales, Inc. 100% ownership |
U.S. Virgin Islands | |||
Lake Bluff, Inc. 100% ownership |
Delaware | |||
Logan, Inc. 100% ownership |
Delaware | |||
Lydell, Inc. 100% ownership |
Delaware | |||
Maroon, Inc. 100% ownership |
Delaware | |||
Mason & Marshall, Inc. 100% ownership |
Delaware | |||
Mason Street Advisors, LLC 100% ownership |
Delaware | |||
Mitchell, Inc. 100% ownership |
Delaware | |||
NM Albuquerque Inc. 100% ownership |
New Mexico | |||
NM-Exchange, LLC 100% ownership |
Delaware | |||
NM-Exchange Three, LLC 100% ownership |
Delaware | |||
NM GP Holdings, LLC 100% ownership |
Delaware | |||
NM Harrisburg, Inc. 100% ownership |
Pennsylvania | |||
NM Imperial, LLC 100% ownership |
Delaware | |||
NM Lion, LLC 100% ownership |
Delaware | |||
NM Majestic Holdings, LLC 100% ownership |
Delaware | |||
NM RE Funds, LLC 100% ownership |
Delaware | |||
NM Regal, LLC 100% ownership |
Delaware | |||
NML-CBO, LLC 100% ownership |
Delaware | |||
NML Development Corporation 100% ownership |
Delaware | |||
NML Real Estate Holdings, LLC 100% ownership |
Wisconsin | |||
NML Securities Holdings, LLC 100% ownership |
Wisconsin | |||
NMRM Holdings LLC 100% ownership |
Delaware | |||
NW Pipeline, Inc. 100% ownership |
Texas | |||
New Arcade, LLC 100% ownership |
Wisconsin | |||
Nicolet, Inc. 100% ownership |
Delaware | |||
North Van Buren, Inc. 100% ownership |
Delaware | |||
Northwestern Ellis Company 100% ownership |
Nova Scotia | |||
Northwestern Investment Management Company, LLC 100% ownership |
Delaware | |||
Northwestern Long Term Care Insurance Company 100% ownership |
Illinois |
C-11
Northwestern Mutual Capital GP, LLC 100% ownership |
||||
Northwestern Mutual Capital Limited 100% ownership |
United Kingdom | |||
Northwestern Mutual Investment Services, LLC 100% ownership |
Wisconsin | |||
Northwestern Mutual Life International, Inc. 100% ownership |
Delaware | |||
Northwestern Mutual Series Fund, Inc. 100%2 ownership |
Maryland | |||
Northwestern Mutual Wealth Management Company 100% ownership |
Federal Savings Bank (subject to jurisdiction of the Office of Thrift Supervision) |
|||
Olive, Inc. 100% ownership |
Delaware | |||
RE Corporation 100% ownership |
Delaware | |||
Regina International Sales, Inc. 100% ownership |
U.S. Virgin Islands | |||
Russell Investment Funds 92.75% ownership |
Massachusetts | |||
Russet, Inc. 100% ownership |
Delaware | |||
Scotty, LLC 100% ownership |
Delaware | |||
Solar Resources, Inc. 100% ownership |
Wisconsin | |||
Stadium and Arena Management, Inc. 100% ownership |
Delaware | |||
Strategic Employee Benefit Services of New Mexico, Inc. 100% ownership |
New Mexico | |||
Travers International Sales, Inc. 100% ownership |
U.S. Virgin Islands | |||
Tupelo, Inc. 100% ownership |
Delaware | |||
Walden OC, LLC 100% ownership |
Delaware | |||
White Oaks, Inc. 100% ownership |
Delaware |
(1) | Certain subsidiaries are omitted on the basis that, considered in the aggregate at year end 2006, they did not constitute a significant subsidiary as defined by Regulation S-X. Except for certain Real Estate Partnerships/LLCs/Equity Interests, includes general account NM investments where NMs ownership interest is greater than 50%. Excluded is the entire corporate structure under Frank Russell Company. |
(2) | Growth Stock Portfolio, Focused Appreciation Portfolio, Large Cap Core Stock Portfolio, Large Cap Blend Portfolio, Index 500 Stock Portfolio, Large Company Value Portfolio, Domestic Equity Portfolio, Equity Income Portfolio, Mid Cap Growth Stock Portfolio, Index 400 Stock Portfolio, Mid Cap Value Portfolio, Small Cap Growth Stock Portfolio, Index 600 Stock Portfolio, Small Cap Value Portfolio, International Growth Portfolio, Research International Core Portfolio, International Equity Portfolio, Emerging Markets Equity Portfolio, Money Market Portfolio, Short-Term Bond Portfolio, Select Bond Portfolio, Long-Term U.S. Government Bond Portfolio, Inflation Protection Portfolio, High Yield Bond Portfolio, Multi-Sector Bond Portfolio, Balanced Portfolio, Asset Allocation Portfolio. |
Item 29. Indemnification
(a) That portion of the By-laws of the Depositor, Northwestern Mutual, relating to indemnification of Trustees and officers is set forth in full in Article VII of the By-laws of Northwestern Mutual, amended by resolution and previously filed as Exhibit A(6)(b) to the registration statement of Northwestern Mutual Variable Life Account (File No. 333-59103) on July 15, 1998.
(b) Section 10 of the Distribution Agreement dated May 1, 2006 between Northwestern Mutual and Northwestern Mutual Investment Services, LLC (NMIS) provides substantially as follows:
B. Indemnification by Company. The Company agrees to indemnify, defend and hold harmless NMIS, its successors and assigns, and their respective officers, directors, and employees (together referred to as NMIS Related Persons), from any and all joint or several losses, claims, damages or liabilities (including any reasonable investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted), to which NMIS and/or any NMIS Related Persons may become subject, under any law, regulation or NASD rule, at common law or otherwise, that arises out of or are based upon (i) any breach of this Agreement by the Company and (ii) any untrue statement of or omission to state a material fact (except for information supplied by or on behalf of NMIS or for which NMIS is responsible) contained in any Registration Statement, Contract prospectus, SAI or supplement thereto or in any Marketing Material.
C-12
This indemnification shall be in addition to any liability that the Company may otherwise have; provided, however, that no person shall be entitled to indemnification pursuant to this provision for any loss, claim, damage or liability due to the willful misfeasance, bad faith or gross negligence or reckless disregard of duty by the person seeking indemnification.
C. Indemnification by NMIS. NMIS agrees to indemnify, defend and hold harmless the Company, its successors and assigns, and their respective officers, trustees or directors, and employees (together referred to as Company Related Persons), from any and all joint or several losses, claims, damages or liabilities (including any reasonable investigative, legal and other expenses incurred in connection with, and any amounts paid in settlement of, any action, suit or proceeding or any claim asserted), to which the Company and/or any Company Related Persons may become subject, under any law, regulation or NASD rule, at common law or otherwise, that arises out of or are based upon (i) any breach of this Agreement by NMIS and (ii) any untrue statement of or omission to state a material fact (except for information supplied by or on behalf of the Company or for which the Company is responsible) contained in any Registration Statement, Contract prospectus, SAI or supplement thereto or in any Marketing Material, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon information furnished in writing by NMIS to the Company specifically for use in the preparation of the aforesaid material.
This indemnification shall be in addition to any liability that NMIS may otherwise have; provided however, that no person shall be entitled to indemnification pursuant to this provision for any loss, claim, damage or liability due to the willful misfeasance, bad faith or gross negligence or reckless disregard of duty by the person seeking indemnification.
D. Indemnification Generally. Any person seeking indemnification under this section shall promptly notify the indemnifying party in writing after receiving notice of the commencement of any action as to which a claim for indemnification will be made; provided, however, that failure to so notify the indemnifying party shall not relieve such party from any liability which it may have to such person otherwise than on account of this section.
The indemnifying party shall be entitled to participate in the defense of the indemnified person but such participation will not relieve such indemnifying party of the obligation to reimburse the indemnified party for reasonable legal and other expenses incurred by such party in defending himself, herself or itself.
Item 30. Principal Underwriters
(a) NMIS is the principal underwriter of the securities of the Registrant. NMIS is also the principal underwriter for the NML Variable Annuity Account A (811-21887), the NML Variable Annuity Account B (811-1668), the NML Variable Annuity Account C (811-21886), and the Northwestern Mutual Variable Life Account II (811-21933).
(b) As of February 1, 2009, the directors and officers of NMIS are as follows:
Name |
Position | |
Jason T. Anderson |
Assistant Treasurer | |
Mark S. Bishop |
Regional Vice President, Field Supervision |
C-13
Christine Bordner |
Assistant Director, Market Conduct | |
Jennifer L. Brase |
Regional Vice President, Field Supervision | |
Pency Byhardt |
Vice President, Field Development | |
Michael G. Carter |
Director | |
Eric P. Christophersen |
Vice President, Compliance/Best Practices | |
David J. Dorshorst |
Director, Compensation Services | |
Michael S. Ertz |
Vice President, Agency Administration | |
Christina H. Fiasca |
Senior Vice President, Field Compensation, Training & Development | |
Brady J. Flugaur |
Manager, Advisory Operations and Oversight | |
Anne A. Frigo |
Director, Insurance and Investment Management | |
Don P. Gehrke |
Director, Retail Investment Operations | |
Timothy J. Gerend |
Vice President, Field Compensation & Planning | |
Mark J. Gmach |
Regional Vice President, Field Supervision | |
David A. Granger |
Assistant Director, Human Resources | |
Mark A. Gregory |
Assistant Director, Insurance and Investment Management | |
Thomas C. Guay |
Vice President, Variable Underwriting & Issue | |
Rhonda K. Haight |
Assistant Director, IPS Platforms | |
David P. Harley |
Assistant Director, Retail Investment Operations | |
Laila V. Hick |
Director, Field Supervision Standards | |
Karla D. Hill |
Assistant Director, Contract, License and Registration Operations | |
Patricia J. Hillman |
Director, Annuity Customer Services | |
Diane B. Horn |
Director, NMIS Compliance; Anti-Money Laundering Compliance Officer | |
Meg E. Jansky |
Director, Annuity Operations | |
Robert J. Johnson |
Director, Compliance/Best Practices | |
Todd M. Jones |
Treasurer, Financial and Operations Principal | |
Martha M. Kendler |
Director, Annuity Products | |
Sharen L. King |
Director, Field Training & Development | |
Mary J. Lange |
Field Education Consultant | |
Dwight Larkin |
Assistant Director- Retail Investment Services & ROSFP, Municipal Securities Principal, MSRB Contact | |
Arleen J. Llewellyn |
Director, IPS Business Integration | |
Werner Loots |
Regional Vice President, Field Supervision | |
Jean M. Maier |
Director; Senior Vice President, Insurance Operations | |
James M. Makowski |
Assistant Director, Marketing Materials Compliance | |
Steven C. Mannebach |
Vice President, Recruiting & Leadership Development | |
Jeffrey S. Marks |
Director, Sales Development | |
Meridee J. Maynard |
Senior Vice President, Product Distribution | |
Mac McAuliffe |
National Sales Director | |
Allan J. McDonell |
Assistant Director, Annuity Operations and Municipal Securities Principal | |
Mark E. McNulty |
Assistant Director, Compliance Assurance | |
Joanne M. Migliaccio |
Director, Contract, License and Registration | |
Michael J. Mihm |
Director, Business Development | |
Jay W. Miller |
Vice President, Advanced Financial Security Planning | |
Benjamin N. Moen |
Regional Vice President, Sales | |
Jennifer W. Murphy |
Secretary | |
Timothy D. Nelson |
Director, Compliance/Best Practices | |
Jeffrey J. Niehaus |
Director, Business Markets | |
Jennifer OLeary |
Assistant Treasurer | |
Kathleen A. Oman |
Vice President, Variable Life Servicing | |
Michael J. Patkunas |
Regional Vice President, Sales | |
John J. Piazza |
Regional Vice President, Sales | |
Nora M. Platt |
Assistant Secretary | |
Gary A. Poliner |
Director; President and CEO | |
Georganne K. Prom |
New Business Variable Life Compliance Coordinator | |
Michael A. Reis |
Assistant Treasurer | |
Daniel A. Riedl |
Senior Vice President and Chief Operating Officer | |
Marcia Rimai |
Director | |
Robin E. Rogers |
Assistant Director, Contract, License & Registration |
C-14
Russell R. Romberger |
Regional Vice President, Sales | |
Jeffrey P. Schloemer |
Assistant Director, Compliance Oversight & Review | |
Calvin R. Schmidt |
Vice President, IPS Investment Client Services | |
Alexander D. Schneble |
Director, NMIS Administration | |
Todd M. Schoon |
Director, Senior Vice President, Agencies | |
Todd W. Smasal |
Director, Human Resources | |
Michael C. Soyka |
Regional Vice President, Sales | |
Paul J. Steffen |
Vice President, Agencies | |
Steven H. Steidinger |
Director, Variable Life Products | |
David G. Stoeffel |
Vice President Product Line | |
William H. Taylor |
Vice President, Advanced Financial Security Planning | |
Kellen A. Thiel |
Director, Personal Investment Markets | |
Donald G. Tyler |
Vice President, IPS Products and Sales | |
Gwendolyn K. Weithaus |
Assistant Director, NMIS Compliance | |
Alan M. Werth |
Third Party Sales Consultant | |
Jeffrey B. Williams |
Vice President and Chief Compliance Officer, NMIS Compliance, Executive Representative | |
Brian D. Wilson |
Director, Marketing and Sales | |
Robert J. Wright |
Director, Strategic Partnerships and Product Support | |
Todd O. Zinkgraf |
Director, Annuity Operations |
The address for each director and officer of NMIS is 611 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
(c) NMIS, the principal underwriter, received $43,654,229 of commissions and other compensation, directly or indirectly, from Registrant during the last fiscal year.
Item 31. Location of Accounts and Records
All accounts, books or other documents required to be maintained in connection with the Registrant's operations are maintained in the physical possession of Northwestern Mutual at 720 East Wisconsin Avenue, Milwaukee, Wisconsin 53202.
Item 32. Management Services
There are no management-related service contracts, other than those referred to in Part A or Part B of this Registration Statement, under which management-related services are provided to the Registrant and pursuant to which total payments of $5,000 or more were made during any of the last three fiscal years.
Item 33. Fee Representation
The Northwestern Mutual Life Insurance Company hereby represents that the fees and charges deducted under the variable life insurance policies which are the subject of this registration statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by the insurance company under the policies.
C-15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, and the Investment Company Act of 1940, the Registrant, Northwestern Mutual Variable Life Account has duly caused this Amended Registration Statement to be signed on its behalf, in the City of Milwaukee, and State of Wisconsin, on the 19th day of February, 2009.
NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT | ||||||||
(Registrant) | ||||||||
By | THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY | |||||||
(Depositor) | ||||||||
Attest: |
/s/RAYMOND J. MANISTA |
By: | /s/EDWARD J. ZORE | |||||
Raymond J. Manista, Vice President, General Counsel and Secretary |
Edward J. Zore, President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this Amended Registration Statement has been signed by the Depositor on the 19th day of February, 2009.
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY (Depositor) | ||||||||
Attest: |
/s/RAYMOND J. MANISTA |
By: | /s/EDWARD J. ZORE | |||||
Raymond J. Manista, Vice President, General Counsel and Secretary |
Edward J. Zore, President and Chief Executive Officer |
Pursuant to the requirements of the Securities Act of 1933, this Amended Registration Statement has been signed below by the following persons in the capacities with the Depositor and on the dates indicated:
Signature |
Title | |
/s/EDWARD J. ZORE |
Trustee, President and Chief Executive Officer; Principal Executive Officer | |
Edward J. Zore | ||
/s/MICHAEL G. CARTER |
Chief Financial Officer and Principal Financial Officer | |
Michael G. Carter | ||
/s/JOHN C. KELLY |
Vice President and Controller; Principal Accounting Officer | |
John C. Kelly |
C-16
/s/ Facundo L. Bacardi* |
Trustee | |
Facundo L. Bacardi | ||
/s/ Robert C. Buchanan* |
Trustee | |
Robert C. Buchanan | ||
/s/ George A. Dickerman* |
Trustee | |
George A. Dickerman | ||
/s/ David J. Drury* |
Trustee | |
David J. Drury | ||
/s/ Connie K. Duckworth* |
Trustee | |
Connie K. Duckworth | ||
/s/ David A. Erne* |
Trustee | |
David A. Erne | ||
/s/ James P. Hackett* |
Trustee | |
James P. Hackett | ||
/s/ Hans Helmerich* |
Trustee | |
Hans Helmerich | ||
/s/ Dale E. Jones* |
Trustee | |
Dale E. Jones | ||
/s/ Stephen F. Keller* |
Trustee | |
Stephen F. Keller | ||
/s/ Margery Kraus* |
Trustee | |
Margery Kraus | ||
/s/ David J. Lubar* |
Trustee | |
David J. Lubar | ||
/s/ Ulice Payne, Jr.* |
Trustee | |
Ulice Payne, Jr. | ||
/s/ H. Mason Sizemore, Jr.* |
Trustee | |
H. Mason Sizemore, Jr. | ||
/s/ Peter M. Sommerhauser* |
Trustee | |
Peter M. Sommerhauser |
C-17
/s/ John E. Steuri* |
Trustee | |
John E. Steuri | ||
/s/ John J. Stollenwerk* |
Trustee | |
John J. Stollenwerk | ||
|
Trustee | |
Barry L. Williams | ||
/s/ Kathryn D. Wriston* |
Trustee | |
Kathryn D. Wriston | ||
|
Trustee | |
S. Scott Voynich |
*By: |
/s/ EDWARD J. ZORE | |
Edward J. Zore, Attorney in fact, | ||
pursuant to the Power of Attorney filed herewith. |
Each of the signatures is affixed as of February 19, 2009.
C-18
EXHIBIT INDEX
EXHIBITS FILED WITH FORM N-6
POST-EFFECTIVE AMENDMENT NO. 16 TO
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
FOR
NORTHWESTERN MUTUAL VARIABLE LIFE ACCOUNT
Exhibit | Description | |||
(j)(c) | Power of Attorney | Filed herewith | ||
(k) | Opinion and Consent of Raymond J. Manista, Esq. dated February 19, 2009 | Filed herewith |
C-19
THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY
TRUSTEES
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS that each of the undersigned Trustees of THE NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, organized by a special act of the Wisconsin Legislature (the Company), by his or her execution hereof, or an identical counterpart hereof, does hereby constitute and appoint Edward J. Zore, as his or her attorney-in-fact and agent, and in his or her name, place and stead, to execute and sign any registration statement, including any pre-effective or post-effective amendments thereto, together with all exhibits and schedules thereto and other documents and instruments associated therewith to be filed on either Form N-4 or Form N-6 (or on any other applicable form) with the Securities and Exchange Commission (the SEC) under the Securities Act of 1933 and/or the Investment Company Act of 1940 in connection with variable contracts issued through separate accounts that are established by the Company, including the following:
(a) | NML Variable Annuity Account A (333-72913); |
(b) | NML Variable Annuity Account A (Fee-Based) (333-133380); |
(c) | NML Variable Annuity Account B (2-29240); |
(d) | NML Variable Annuity Account B (Fee-Based) (333-33232); |
(e) | NML Variable Annuity Account C (2-89905-01); |
(f) | NML Variable Annuity Account C (Network Edition) (333-133381); |
(g) | Northwestern Mutual Variable Life Account (2-89972); |
(h) | Northwestern Mutual Variable CompLife (33-89188); |
(i) | Northwestern Mutual Variable Executive Life (333-36865); |
(j) | Northwestern Mutual Variable Joint Life (333-59103); |
(k) | Northwestern Mutual Custom Variable Universal Life (333-136124); |
(l) | Northwestern Mutual Executive Variable Universal Life (333-136305); and |
(m) | Northwestern Mutual Survivorship Variable Universal Life (333-136308). |
Each of the undersigned does hereby further authorize said attorney-in-fact and agent to make said filings with the SEC and with any federal or state securities or insurance regulatory authority as they determine to be required or necessary. Each of the undersigned hereby ratifies and confirms all acts of each and either of said attorneys-in-fact and agents which they may lawfully do or cause to be done by virtue hereof. As used herein, variable contracts means any contracts providing for benefits or values which may vary according to the investment experience of the separate account associated therewith, including variable annuity contracts and variable life insurance policies.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her hand this 23rd day of July, 2008.
/s/ Facundo L. Bacardi | Trustee | |||
Facundo L. Bacardi | ||||
/s/ Robert C. Buchanan | Trustee | |||
Robert C. Buchanan | ||||
/s/ George A. Dickerman | Trustee | |||
George A. Dickerman |
/s/ David J. Drury | Trustee | |||
David J. Drury | ||||
/s/ Connie K. Duckworth | Trustee | |||
Connie K. Duckworth | ||||
/s/ David A. Erne | Trustee | |||
David A. Erne | ||||
/s/ James P. Hackett | Trustee | |||
James P. Hackett | ||||
/s/ Hans Helmerich | Trustee | |||
Hans Helmerich | ||||
/s/ Dale E. Jones | Trustee | |||
Dale E. Jones | ||||
/s/ Stephen F. Keller | Trustee | |||
Stephen F. Keller | ||||
/s/ Margery Kraus | Trustee | |||
Margery Kraus | ||||
/s/ David J. Lubar | Trustee | |||
David J. Lubar | ||||
/s/ Ulice Payne, Jr. | Trustee | |||
Ulice Payne, Jr. | ||||
/s/ H. Mason Sizemore, Jr. | Trustee | |||
H. Mason Sizemore, Jr. | ||||
/s/ Peter M. Sommerhauser | Trustee | |||
Peter M. Sommerhauser | ||||
/s/ John E. Steuri | Trustee | |||
John E. Steuri | ||||
/s/ John J. Stollenwerk | Trustee | |||
John J. Stollenwerk |
Trustee | ||||
Barry L. Williams | ||||
/s/ Kathryn D. Wriston | Trustee | |||
Kathryn D. Wriston | ||||
/s/ Edward J. Zore | Trustee | |||
Edward J. Zore |
Exhibit (k)
February 19, 2009
The Board of Trustees
The Northwestern Mutual Life
Insurance Company
720 E. Wisconsin Avenue
Milwaukee, WI 53202
To The Board Of Trustees:
In my capacity as General Counsel of The Northwestern Mutual Life Insurance Company (the Company), I have reviewed the establishment of The Northwestern Mutual Variable Life Account (the Account), on November 23, 1983, by the Companys Board of Trustees, as a separate account for assets applicable to certain variable life insurance policies, pursuant to the provisions of Section 206.385 of the Wisconsin Statutes of 1965, as amended.
Company attorneys under my general supervision have prepared the Post-Effective Amendment No. 16 to the Registration Statement on Form N-6 (1933 Act File No. 333-59103) filed by the Company and the Account with the Securities & Exchange Commission under the Securities Act of 1933 for the registration of certain variable life insurance policies issued with respect to the Account.
I have made such examination of the law and examined such corporate records and such of the documents as in my judgment are necessary and appropriate to enable me to render the following opinion that:
(1) The Company has been duly organized under the laws in the State of Wisconsin and is a validly existing mutual life insurance company.
(2) The Account has been duly created and is validly existing as a separate account pursuant to the aforesaid provisions of Wisconsin law.
(3) The assets held in the Account equal to the reserves and other contract liabilities with respect to the Account will not be chargeable with liabilities arising out of any other business the Company may conduct.
(4) The variable life insurance policies, when issued in accordance with the prospectus contained in the aforesaid registration statement and upon compliance with
The Board of Trustees
February 19, 2009
Page 2
applicable local law, will be legal and binding obligations of The Northwestern Mutual Life Insurance Company in accordance with their terms.
I hereby consent to the filing of this opinion as an exhibit to the Registration Statement.
Very truly yours, |
/s/ RAYMOND J. MANISTA |
Raymond J. Manista General Counsel |
Chad E. Fickett Assistant General Counsel 720 East Wisconsin Avenue Milwaukee, WI 53202-4797 414 665 1209 office 414 625 1209 fax chadfickett@northwesternmutual.com | ||||
February 19, 2009 |
Securities and Exchange Commission
Attention: Division of Investment Management
450 Fifth Street, NW
Washington, DC 20549
Re: | Northwestern Mutual Variable Life Account |
(Variable Joint Life) |
1933 Act Post-Effective Amendment No. 16 to |
Registration Statement on Form N-6 |
File No. 333-59103 |
EDGAR CIK No. 0000742277 |
Ladies and Gentlemen:
We are submitting herewith Securities Act of 1933 Post-Effective Amendment No. 16 to the Registration Statement on Form
N-6 identified
above. The material filed is also submitted as Amendment No. 24 to the Registration Statement under the Investment Company Act of 1940, File No. 811-03989.
The prospectus and statement of additional information, filed as part of the Post-Effective Amendment referenced above, have been revised to update, clarify, and rearrange the disclosure therein, and to add new disclosures regarding certain items separately discussed with the Staff.
Our intention is that Post-Effective Amendment No. 16 become effective on May 1, 2009, in accordance with the provisions of paragraph (a) of Rule 485.
Please call the undersigned with any questions or comments about this filing.
Very truly yours,
/s/ Chad E. Fickett
Chad E. Fickett
Assistant General Counsel
Enc.
cc: Mr. Craig Ruckman